Some analysts have been predicting a collapse in sales for the US economy. One prominent economist announced in a recent round of TV interviews that sales generally were in the process of “rolling over.” On that assumption, the economy is in recession, he explained. But a funny thing happened on the way to the collapse: sales have held up, and even turned up. Yesterday’s November update on wholesale trade figures is the latest data point that contradicts the pessimistic view on the macro trend.
Wholesale trade sales rose a respectable 2.3% in November, the Census Bureau reports. That follows the previously released updates on November retail sales (+ 0.3%) and November manufacturers’ sales (+0.4%). The message is clear: sales in November increased across a broad spectrum of the US economy.
More importantly, the year-over-year trend remains positive through November for all three data sets. In fact, the pace of annual growth overall has turned modestly higher vs. recent history. The latest numbers through November show that the year-over-year percentage increases range from 3.7% (manufacturing and retail) to 5.6% (wholesale).
For a clearer look at how the annual rates compare, let’s focus on recent history. Here’s how each of the sales indicators stacks up in terms of annual changes, including an aggregate measure of all three, as shown by the gray bars. Overall, manufacturing, wholesale and retail sales rose 4.3% in November vs. a year earlier. That’s up from October’s 3.2% increase and comfortably above the low growth rates in the summer. No one will confuse the recent increases as historically strong comparisons, but the numbers don’t equate with an economy that’s contracting either.
Ok, but how does December look? It’s still early, but the incoming data for last month so far is encouraging, as I discussed earlier this week. Yes, the future is surely loaded with surprises. Based on the numbers in hand, however, the case for arguing that modest growth remains the path of least resistance continues to look like a reasonable view.