Released: 21 January 2021
January Sales Data Reveals Renewed U.S. Growth, but Prices Are Rising Fast, and the Job Market Stays Weak
The most serious negative to emerge from the January survey was the continuation of the widespread price rises seen since November. It is looking increasingly likely that the US will see the re-emergence of significant price inflation in 2021. Given the almost 25% increase in broad based money supply measures since the Covid virus arrived last year (the biggest jump seen in 150 years), it is not surprising that a recent Bank of America survey showed inflation expectations at an all time high. These survey results confirm that these expectations look like turning into reality, and the Federal Reserve's new caution in relation to the likelihood of 2%+ price changes are well justified. Rises of the order of 3-4% no longer seem unlikely.
Sales facing Indexes were more positive this month. Business Confidence rose to an 11-month high in January and is now well over the crucial 50 "no growth" level. Panelists are clearly feeling more confident and the first half of 2021 should see some return to normality. The Market Growth Index rose to a 15-month high, with a sharp jump up from the "no growth" levels recorded in late 2020. As this question asks panelists about the level of absolute growth in their markets, and not with reference to the previous month, the increase is likely to reflect a significant positive movement.
The Staffing Levels Index however did not provide welcome news. The Index reversed direction and plunged back below the 50 no growth level. Given the increasing activity levels this means employers continue acting with considerable caution.
United States: Prices Charged Sales Managers Index
The Headline Sales Managers' Index (SMI) - a composite indicator designed to provide the most up-to-date assessment of business activity.
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