Stocks continue to sit near five-year highs thanks to corporate profits rebounding from the recession and surging to all-time highs.
Meanwhile, the U.S. economic recovery continues to be anemic. And the biggest symptoms of that are the weak labour market and low wages.
These two stories go hand-in-hand because part of the corporate profit rebound has been driven by lower costs in the form of workforce and wage reduction.
This chart from Goldman Sachs’ David Kostin demonstrates that dynamic perfectly:
Photo: Goldman Sachs
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