This “Oddball” Indicator Says the Economy Is Booming
What Christmas Tree Sales Could Say About the Economy
There are many indicators describing different aspects of the economy, such as gross domestic product (GDP), the unemployment rate, and the consumer price index (CPI). But here’s one “oddball” indicator that I bet you have never used before: Christmas tree sales.
According to the results of a survey from Evercore ISI Institutional Equities, Christmas tree sales in the past four weeks in the U.S. have increased 10% from a year ago. The Wall Street Journal calls this “an interesting metric of U.S. consumer health,” and said that this year’s sales have shown “the biggest increase in years.” (Source: “WSJ’s Daily Shot: Americans Are Rushing for Mortgages As Rate Rise,” The Wall Street Journal, December 21, 2016.)
While Christmas tree sales seem to reflect consumer’s enthusiasm, keep in mind that consumption is a key component of the economy in the United States. On average, consumer consumption has accounted for about two-thirds of U.S. GDP.
One of the reasons behind the increased enthusiasm could be Donald Trump’s surprise victory in the U.S. presidential election. In particular, a number of surveys released in recent weeks have shown major increases in expectations about how the economy will be doing.
For instance, the National Association of Home Builders (NAHB) said that its Housing Market Index (HMI) surged to 70 (on a scale of 0 to 100) in December, marking its highest reading since July 2005. The index is based on a monthly survey of NAHB members to take the pulse of the single-family housing market. The NAHB said that the increase in builder sentiment was largely due to “a post-election bounce.” (Source: “Builder Confidence Closes Year on a High Note,” National Association of Home Builders, December 15, 2016.)
Another example is the result from the Empire State Manufacturing Survey. The Federal Reserve Bank of New York said that the headline general business conditions index climbed from 1.5 to 9.0 in November. Moreover, the index for future business conditions shot up 20 points to 50.2, its highest level in nearly five years. Sixty-one percent of respondents said they expect future business conditions to improve. (Source: “Empire State Manufacturing Survey,” Federal Reserve Bank of New York, last accessed December 22, 2016.)
Dear Reader: There is no magic formula to getting rich. Success in investment vehicles with the best prospects for price appreciation can only be achieved through proper and rigorous research and analysis. We are 100% independent in that we are not affiliated with any bank or brokerage house. Information contained herein, while believed to be correct, is not guaranteed as accurate. Warning: Investing often involves high risks and you can lose a lot of money. Please do not invest with money you cannot afford to lose. The opinions in this content are just that, opinions of the authors. We are a publishing company and the opinions, comments, stories, reports, advertisements and articles we publish are for informational and educational purposes only; nothing herein should be considered personalized investment advice. Before you make any investment, check with your investment professional (advisor). We urge our readers to review the financial statements and prospectus of any company they are interested in. We are not responsible for any damages or losses arising from the use of any information herein. Past performance is not a guarantee of future results. All registered trademarks are the property of their respective owners
Sign up to receive our FREE Income Investors newsletter along with our special offers and get our FREE report:
5 Dividend Stocks to Own Forever
This is an entirely free service. No credit card required. You can opt-out at anytime.
We hate spam as much as you do.