Historical Growth Rates
According to economist Robert Shiller, earnings per share on the S&P 500 grew at a 3.8% annualized rate between 1874 and 2004 (inflation-adjusted growth rate was 1.7%). Since 1980, the most bullish period in U.S. stock market history, real earnings growth according to Shiller, has been 2.6%.
The table below gives recent values of earnings growth for S&P 500.
| Date | Index | P/E | EPS growth (%) | Comment |
|---|---|---|---|---|
| 12/31/2007 | 1468.36 | 17.58 | 1.4 | |
| 12/31/2006 | 1418.30 | 17.40 | 14.7 | |
| 12/31/2005 | 1248.29 | 17.85 | 13.0 | |
| 12/31/2004 | 1211.92 | 20.70 | 23.8 | |
| 12/31/2003 | 1111.92 | 22.81 | 18.8 | |
| 12/31/2002 | 879.82 | 31.89 | 18.5 | |
| 12/31/2001 | 1148.08 | 46.50 | -30.8 | 2001 contraction resulting in P/E Peak |
| 12/31/2000 | 1320.28 | 26.41 | 8.6 | Dot-com bubble burst: March 10, 2000 |
| 12/31/1999 | 1469.25 | 30.50 | 16.7 | |
| 12/31/1998 | 1229.23 | 32.60 | 0.6 | |
| 12/31/1997 | 970.43 | 24.43 | 8.3 | |
| 12/31/1996 | 740.74 | 19.13 | 7.3 | |
| 12/31/1995 | 615.93 | 18.14 | 18.7 | |
| 12/31/1994 | 459.27 | 15.01 | 18.0 | |
| 12/31/1993 | 466.45 | 21.31 | 28.9 | |
| 12/31/1992 | 435.71 | 22.82 | 8.1 | |
| 12/31/1991 | 417.09 | 26.12 | -14.8 | |
| 12/31/1990 | 330.22 | 15.47 | -6.9 | July 1990-March 1991 contraction. |
| 12/31/1989 | 353.40 | 15.45 | . | |
| 12/31/1988 | 277.72 | 11.69 | . | Bottom (Black Monday was October 19, 1987) |
The Federal Reserve responded to decline in earnings growth by cutting the Intended federal funds rate (from 6.00 to 1.75% in 2001) and raising them when the growth rates are high(from 3.25 to 5.50 in 1994, 2.50 to 4.25 in 2005).
Read more about this topic: Earnings Growth
Famous quotes containing the words historical, growth and/or rates:
“Reason, progress, unselfishness, a wide historical perspective, expansiveness, generosity, enlightened self-interest. I had heard it all my life, and it filled me with despair.”
—Katherine Tait (b. 1923)
“Hence, the less government we have, the better,—the fewer laws, and the less confided power. The antidote to this abuse of formal Government, is, the influence of private character, the growth of the Individual; the appearance of the principal to supersede the proxy; the appearance of the wise man, of whom the existing government, is, it must be owned, but a shabby imitation.”
—Ralph Waldo Emerson (1803–1882)
“In the U.S. for instance, the value of a homemaker’s productive work has been imputed mostly when she was maimed or killed and insurance companies and/or the courts had to calculate the amount to pay her family in damages. Even at that, the rates were mostly pink collar and the big number was attributed to the husband’s pain and suffering.”
—Gloria Steinem (20th century)