For clues to the economy, look to gun sales and other offbeat data
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Lots of routine economic statistics are released each month –- unemployment rates, home sales, etc.
But hoping to get beyond the numbers that everyone else chews on, one Wall Street prognosticator delved into a more eclectic sampling of data, such as gun sales and demand for silver coins.
Such “off the grid” indicators support the widely held notion that the U.S. economy is mending slowly, Nicholas Colas, chief market strategist at ConvergEx Group in New York, wrote in a report to clients. But they also point to some potentially troublesome undercurrents.
On the positive side, sales of pickup trucks have risen at a 20% annual rate for the last few months. Pickups are often bought by small businesses, which bodes well for that critically important sector.
Likewise, a growing number of workers who leave companies these days are quitting rather than being fired, indicating that they’re either finding other jobs or are confident of being able to in the future.
But the data also suggest potential danger over what Colas refers to as “consumer security” –- basically, underlying economic and societal concerns that could serve as long-terms drags on the recovery.
For example, gun sales have risen from a long-term rate of about 8 million a year to the current 14 million, according to Colas. Analysts initially attributed the rise to fear of tougher gun-control laws after the election of President Obama. But the continuing climb two years into his term points to a “deeper sense of unease,” be it over government regulations, crime or some something else, Colas wrote.
In the same vein, a jump in demand for silver coins suggests a “fundamental lack of confidence among enough people in the population as to the long-term soundness of the dollar.”
And a rise in the number of people on food stamps –- currently about 43 million people, or 14% of the U.S. population –- points to the deep strains on lower-income people.
“A consumer base -– even one at the lower end of the economic ladder -– with fundamental
concerns over food security and affordability or personal safety is not the ‘dry tinder’ of a strong economic bounce back,” Colas wrote.
-- Walter Hamilton