Signs of life: Taking the pulse of the economy

Columns - Viewpoint

There's actually some good news out there concerning the economy. No, really, there is.

June 22, 2010
Kelli Rodda
Kelli Rodda

There’s actually some good news out there concerning the economy. No, really, there is.
The Business Roundtable released results from its first quarter 2010 CEO Economic Outlook survey. The top dogs of America’s leading companies anticipate increased capital expenditures, sales and employment during the next six months. Of the CEOs surveyed, 29 percent expect their U.S. employment to increase during this quarter, compared to 7 percent during the same quarter last year.
Much of this quarter’s good news comes from the labor market, blogged Charlie Hall, ag economist and Ellison Chair in International Floriculture at Texas A&M University. (Follow his economic updates here) “The increase of 162,000 payroll jobs in March was the largest in three years,” he said. Layoffs have subsided to pre-recession levels. Job openings have ended their precipitous decline.”
Bill Conerly of Conerly Consulting and The Businomics Newsletter pointed to three encouraging signs in May: growth in the GDP, jobs and consumer spending. He also said businesses are “poised for inventory accumulation.”

Retail, housing increases
The Commerce Department released retail sales for April 2010. Retail sales increased 0.4 percent, following a large 2.1 percent rise in March. Sales of building materials and garden equipment and supplies jumped 6.9 percent, following a similarly large gain in March. Private-sector analysts had expected a small decline of 0.1 percent in total sales in April. I’m glad they were wrong. A San Antonio garden center owner told me at the beginning of May that he was having the best spring in his 20+ years of operation.
Sales of new, single-family homes increased 14.8 percent in April to 504,000 units, well above the expectations of a 3.4 percent monthly increase. New home sales have risen 47.8 percent above their level in April a year ago.

Economic indicators
But Time magazine’s Dan Kadlec wants business owners and consumers to look at these indicators for an economic upswing.

  • Home sales. They started the downturn, so any upswing is a good sign.
  • Temporary hiring. Firms that have slashed payroll will eventually see business pick up, and will turn to temp agencies for the increased workload.
  • Car sales. When vehicle sales tick up, you’ll know the fear has gone.
  • Pasta sales. Pasta is cheap, so Americans buy more in tough times. Watch for shares of the American Italian Pasta Company to drop, which hovered around $39 in May.

It’s OK to celebrate incremental growth. Look for those upticks in sales and construction, and get aggressive with your marketing.