Don’t Take That Holly Jolly Christmas to the BankSarah Quinlan |
It wasn’t exactly euphoria, yet there were words like “strong” and “better than expected” published around last week’s jobs and GDP numbers. But their predicative power in re the coming holiday season is so far at least ambiguous.
First, employment, which according to the Establishment Survey (corporations), had 60,000 jobs added to the September and August totals. But, underemployment, known as U-6, was 13.4 percent: 25 million Americans still want a full-time job and cannot find one. That means their spending power is diminished
GDP was up 2.8 percent, ahead of the 2.0 percent consensus; but such improvement was really based upon inventory build up and not final demand for goods. In fact import growth slowed to 1.9 percent which can partially explain the European Central Bank (ECB) rate cut on lower inflation. Final sales to domestic purchasers softened to 1.9%
Spending Pulse U.S. October numbers reflected some of the positive data, with 3.8 percent YOY growth as consumers embraced the certainty of the U.S. fiscal deal; also the change to fall and colder weather released some pent up demand in children’s clothing. There was also some healthy demand for restaurants and jewelry, which are clearly discretionary items. But it’s simply too early to call a trend as it follows three months of declining sales; yet this is some hopeful information in advance of the important holiday purchase season.