Chart 1: Recoveries in corporate profits and business investment will be essential elements of the next U.S. economic expansion.

Chart 1A:
Year Quarter Year-over-Year Change in Quarterly Net Income from Continuing Operations for All S&P 500 Firms
1996 4 14.04%
1997 1 15.13%
1997 2 10.74%
1997 3 12.89%
1997 4 7.94%
1998 1 3.63%
1998 2 3.49%
1998 3 -1.78%
1998 4 4.82%
1999 1 10.61%
1999 2 16.18%
1999 3 21.34%
1999 4 22.34%
2000 1 20.39%
2000 2 19.76%
2000 3 17.50%
2000 4 5.22%
2001 1 -7.37%
2001 2 -19.18%
2001 3 -21.56%
2001 4 -24.24%
Source: Bloomberg

Chart 1B:
Year Quarter Year-over-Year Change in Business Investment in Equipment and Software, in Chained 1996 Dollars
1996 4 10.37%
1997 1 9.46%
1997 2 8.92%
1997 3 10.16%
1997 4 9.69%
1998 1 12.23%
1998 2 12.23%
1998 3 9.49%
1998 4 11.70%
1999 1 8.86%
1999 2 7.57%
1999 3 8.44%
1999 4 6.40%
2000 1 8.03%
2000 2 8.62%
2000 3 7.41%
2000 4 6.28%
2001 1 3.38%
2001 2 -1.33%
2001 3 -3.38%
2001 4 -6.36%
Source: Bureau of Economic Analysis