Wednesday, December 01, 2010

More "Non-End-of-the-World Economic Data"

Thanks to Daniel Gross for that great headline.   

1. Automakers reported strong sales gains in November, as "the economy accelerates out of the 2007-2009 slump."  U.S. vehicle sales in November of 873,323 light trucks and passenger cars were above last year's sales by 16.9%, led by a whopping 26.6% gain in light truck sales and a more modest 7.4% improvement in passenger car sales. Year-to-date sales of 10.44 million units so far this year are more than one million vehicles ahead of the 9.4 million units sold last year through November.  On a seasonally adjusted annual rate basis, vehicle sales in November topped 12 million units for the second month in a row for the first time in more than two years, going back to the late summer of 2008.    

2. According to today's ADP National Employment Report, private sector employment increased by 93,000 jobs in November, the largest monthly job gain in three years and the tenth consecutive monthly improvement.  October's employment increase was revised upward from a previously reported 43,000 jobs to 82,000, bringing the total gain over the last two months to 175,000 new private-sector jobs. More than half of the job increases in November (54,000) were added by small businesses (fewer than 50 employees).  

Now here's a possible connection between these two reports: Pickup trucks are typically purchased by small business owners and entrepreneurs, and the huge increase in November truck sales is an indication of increased business activity for America's small businesses.  The increased business activity for small businesses also translates into increased hiring by small businesses, which we saw in ADP's November job report.   



8 Comments:

At 12/01/2010 6:10 PM, Blogger Benjamin said...

I bought a pick-up truck as I thought it would help me in my love life. A "pick-up" truck. Isn't that why they are festooned with leather seats and fancy tailights?
Now, you tell me it is for business only?

 
At 12/01/2010 6:11 PM, Blogger VangelV said...

OK. Let me point out a few negatives in the numbers.

U.S. vehicle sales in November of 873,323 light trucks and passenger cars were above last year's sales by 16.9%, led by a whopping 26.6% gain in light truck sales and a more modest 7.4% improvement in passenger car sales.

This tells us that the Volt is a white elephant and that GM's plans for recovery will take a huge hit because of the lousy investment choices it made when it decided to build an all electric vehicle.

Year-to-date sales of 10.44 million units so far this year are more than one million vehicles ahead of the 9.4 million units sold last year through November. On a seasonally adjust annual rate basis, vehicle sales in November topped 12 million units for the second month in a row for the first time in more than two years, going back to the late summer of 2008.

Last year's numbers were weak. So was 2008. This means that we have yet to see a full recovery.

October's employment increase was revised upward from a previously reported 43,000 jobs to 82,000, bringing the total gain over the last two months to 175,000 new private-sector jobs.

This is supposed to be good news? How?

The increased business activity for small businesses also translates into increased hiring by small businesses, which we saw in ADP's November job report.

This may be right but then again, we need some more data before we can see a recovery. If we really had a real recovery why would the Fed have gone with QE2 and why wouldn't rates be a few percent higher?

 
At 12/01/2010 6:59 PM, Blogger morganovich said...

auto sales were a bit over 16mn from 2005-7.

we're still a long way off of "healthy" despite recent improvements.

 
At 12/01/2010 9:03 PM, Blogger Hydra said...

What we have now is healthy.

What we had before was a bubble.

 
At 12/01/2010 9:58 PM, Blogger VangelV said...

What we have now is healthy.

What we had before was a bubble.


The headline U-3 unemployment rate stands close to 10%. The U-6 unemployment rate, which includes the short-term discouraged workers, is around 17%. When the long-term discouraged workers, who Clinton defined out of existence in 1994, are added to the mix the true unemployment rate is over 20%. If that is healthy I don't know what you would consider sick.

 
At 12/02/2010 10:07 AM, Blogger morganovich said...

hydra-

look at this long term chart of US light vehicle sales:

http://cr4re.com/charts/charts.html?Retail#category=Retail&chart=VehicleSalesNov2010Long.jpg

it's very clear from it that there was no bubble in car sales and that current levels are still heavily depressed, especially if you adjust for population growth.

 
At 12/02/2010 4:53 PM, Blogger juandos said...

More "Non-End-of-the-World Economic Data"...

Apparently this doesn't apply if one is a bureaucrat if Charles Hughs Smith on his, "Of Two Minds" blog knows what he's talking about...

The Lifecycle of Bureaucracy

 
At 12/03/2010 6:18 AM, Blogger PeakTrader said...

Hydra: "What we have now is healthy. What we had before was a bubble."

Depressions or massive idle resources aren't healthy, and asset bubbles are unimportant, except how they influence economic growth.

We're a long way from optimal growth.

 

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