Corporate Profit Growth and Variability in US Unemployment Rate

Abstract

This study investigates effects of corporate profit growth, macroeconomic uncertainty and other key economic indicators on the potential for lower unemployment condition in the US economy. Using marginal effect probit estimates, this study finds that, sustained growth in corporate profit and appreciable economic growth (as measured by GDP growth) are significant in determining the likelihood of achieving lower unemployment rate. Overall results however, show that among variables tested, reduction in perceived macroeconomic uncertainty is the dominant variable with the potential to significantly impact the likelihood of having lower unemployment rate.