This share lies above its long-run average over the past few decades and well above the cyclical trough of 7 percent in 2001. To be sure, the profit share will likely slip a bit from its high level as the expansion gains steam and businesses are less able to keep a lid on their labor costs.
Moreover, because cyclical factors likely contributed to the recent dramatic advances in productivity, we should expect productivity gains to moderate. But these developments and the decline in profit share are to be expected and will not, in my view, lead to a meaningful impairment of the financial health of companies.