One charts tells the story.

As the Powell Fed jawbones about a “mid-cycle adjustment,” Hedgeye CEO Keith McCullough highlights a simple chart that puts that flawed notion to bed.

This chart, highlighted in the clip above, is an excellent indicator of just how late in the economic cycle we really are.

“Corporate profits versus labor…is one of the most basic relationships in finance and in America,” McCullough explains on a recent edition of The Macro Show, adding that peaking labor and wages is the latest of late-cycle indicators.

“The only thing we know for sure is that labor is going higher and corporate profits are going lower."

"This is the most important point I’m trying to make that is going to be squarely realized when earnings are going to be negative, year-over-year.”

Watch the full clip above for more.

This Chart Shows How Late Cycle This Economy Is - early look