U.S. corporate profits experienced their largest quarterly decline since 2020 in the first quarter of 2025. According to data from the Bureau of Economic Analysis (BEA), profits dropped between 2.9% and 3.6%, with an estimated $118 billion decrease. Despite this decline, year-over-year growth in corporate profits remained positive at 5.5%, marking the slowest growth rate since the third quarter of 2023 but still above historical averages. The reduction in profits is attributed to challenges faced by large companies, including disruptions caused by tariffs and weakening consumer demand. Although profits have decreased, they remain at historically elevated levels.