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:
“Religion means goal and way, politics implies end and means. The political end is recognizable by the fact that it may be attained—in success—and its attainment is historically recorded. The religious goal remains, even in man’s highest experiences, that which simply provides direction on the mortal way; it never enters into historical consummation.”
—Martin Buber (1878–1965)
“You know that the nucleus of a time is not
The poet but the poem, the growth of the mind
Of the world, the heroic effort to live expressed
As victory. The poet does not speak in ruins
Nor stand there making orotund consolations.
He shares the confusions of intelligence.”
—Wallace Stevens (1879–1955)
“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)