The Department of Commerce reported Tuesday that corporate profits increased over $44 billion in the third quarter to $1.65 trillion, a 27.8% increase from the third quarter of 2009, and the highest on record. Profits for the second quarter were $1.61 trillion.

The New York Times noted that corporate profits have been doing "extremely well" for a while, attributing the "breakneck pace" to "strong productivity growth — which means companies have been able to make more with less — as well as the fact that some of the profits of American companies come from abroad."

Corporations lost $57.8 billion in current-production cash flow for the third quarter; in the second quarter, current-production cash flow gained $61.1 billion.

Taxes increased $31.8 billion. Profits after tax increased as well, though decidedly lower than second quarter increases: $12.6 billion in the third quarter compared with $45.2 billion in the second quarter.

Pre-tax profits jumped $76.3 billion, compared with an increase of $15.3 billion in the second quarter. The report noted that this measure doesn't take into account capital consumption and inventory valuation adjustments. The capital consumption adjustment $1.4 billion in the third quarter and the inventory valuation adjustment fell $33.2 billion.

Domestic profits for financial corporations fared much better in the third quarter, rising $33.3 billion, compared with a drop of $3.4 billion last quarter. Nonfinancial corporations also saw an increase in domestic profits, adding $18.6 billion.

Real gross domestic product increased as well, growing 2.5% in the third quarter. The increase in real GDP is a result of increases in "personal consumption expenditures (PCE), private inventory investment, nonresidential fixed investment, exports, and federal government spending that were partly offset by a negative contribution from residential fixed investment," according to the Department.

The report noted that the acceleration in GDP is from a "sharp deceleration" in imports, as well as accelerations in private inventory investment and PCE.

The price index for gross domestic purchases including food and energy increased 0.8%. Real personal consumption expenditures increased 2.8% in the third quarter, and exports of goods and services increased 6.3%, down from the second quarter's 9.1% increase.

Gross national product increased 2.3%, up from a 1.8% increase in the second quarter. GNP includes income from the rest of the world, which fell $5.4 billion in the third quarter.