How well are advent calendars for dogs going to sell this year, do you think? These are, of course, important products. It is only right that in the Christmas festivities, our pooches have something to look forward to. It is a shame no one has yet come up with similar calendars just for guineas pigs; no doubt that one will have to wait for the next boom.
But, pet related consumption aside, it seems consumers are back. They are back on the High Streets of Blighty, and in the shopping malls across the pond. Even the Germans seems to have done the one thing they had previously looked allergic to, and opened up their purses and wallets.
In the UK the good news came courtesy of the CBI. Its latest Distributive Trades survey was a good one. The headline index, created by asking retailers if sales were up or down and taking one from the other to get a percentage balance, was plus 43 in November, compared to 36 in the previous month. This was the second highest reading since April 2007 (the highest was in September).
More to the point, the percentage balance of retailers who expect sales to rise on last year in the run up to Christmas was plus 43 per cent.
So much for Blighty. Across the pond the news is good too. In fact, good news for US consumption has come in three waves this week. First off came the latest estimate of US GDP for Q3. It was revised upwards from 2 per cent, to 2.5 per cent. But, significantly, consumption rose by 2.8 per cent, the biggest jump since Q1 2006.
Then data out on Wednesday revealed that US nominal consumer spending rose 0.4 per cent in October. Capital Economics chose apt words to describe the performance, saying: “Households [are] picking up the baton of growth from businesses.” It’s a good job too, by the way, because it looks as though the US inventory cycle has run its course, and business spending is being reined in.
The third wave was the most promising of the lot. Personal incomes rose by 0.5 per cent in October, and disposable personal income by 0.4 per cent. Equally encouraging, the data for September was revised upwards. This data is actually quite a big deal. Last month, the same report revealed a 0.1 per cent contraction in personal income and a 0.3 per cent contraction in disposable personal income. This column made much of this development, warning that if US consumers are getting poorer, then, well, that’s bad news. So the upwards revision to this data, coupled with the better than expected figures for October, should come as a relief.
It is looking as though this Christmas will be a good one, or relatively so anyway, in the UK and the US. Whether that will continue into 2011, however, is another matter. For the UK, it is quite possible shoppers are spending their money before VAT goes up.
And so to Germany.
While the Eurozone stumbles from one crisis to the next, Germany is doing very nicely, thank you very much. November’s IFO business sentiment index surged to its highest level since reunification. Capital Economics reckons the index is consistent with growth of around 5 per cent. But what is really interesting about this latest IFO report is that it also pointed to a buoyant retail sector in Germany. And that means Germans must be spending.
Imagine that, German consumers spending, and without an advent calendar for dogs anywhere to be seen.
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