This Is Why Ford Motor and Home Depot Are on the Upswing

Economic reports can be dry and boring -- except when they unveil consumer trends with real market value. This time, sellers of big-ticket goods are in for a treat.

May 1, 2014 at 5:34PM

Consumers came out of a bitter winter hungry to spend their growing income on long-delayed purchases with large price tags.

The U.S. Bureau of Economic Analysis just shared some good news about the American consumer. By extension, it's also great tidings for big-ticket consumer-goods vendors such as Ford (NYSE:F) and Home Depot (NYSE:HD). Let me explain why.

Workers in America saw personal income increase by 0.5% in March, matched by a 0.5% jump in after-tax disposable income. These are the biggest gains seen in those crucial metrics since last September -- and the metrics rose 0.4% in each of the previous two months.

Consumers are feeling their newfound financial freedom, too. Consumer spending jumped 0.9% in March. While the income gains marked multimonth highs, the spending pace hasn't been this brisk since August 2009.


The throwback to 2009 isn't accidental, either. Durable-goods sales jumped 2.6% in March, driven by strong sales of big-ticket items like cars and home appliances. In summer 2009, that surge rested on the "cash for clunkers" program.

The frisky spending includes some pent-up demand, since many buyers delayed their trips to the car dealership or home goods store until the end of the recent harsh winter. But it's also a strong vote of confidence in the recovering economy.

The big March surge in automobile sales, leaning more toward recreational vehicles than daily workhorses, explains how Ford could overcome the Fimbulwinter to post solid first-quarter sales.

We're still a couple of weeks away from Home Depot's first-quarter report, which will include the home appliance surge in March. Expect a solid report at the least, driven by an undeniable surge in customers' financial flexibility.

Working backward from there, spending can't increase without support from the income side of the equation. Rising wages per person are only part of that metric, with the rest coming from more workers drawing a paycheck in the first place.

That relationship gives us clues on what to expect from next month's personal-income and consumer-spending report. The private sector added 209,000 jobs in March and 220,000 in April. There's no direct cause-and-effect relationship here, but the employment trend provides a strong foundation for another positive tally when the April numbers drop in.

Gross domestic product growth (just 0.1% in the first quarter) might not be where economists would like, but that's not the only report that matters. In short, the American economy is recovering quite nicely as we speak -- soft GDP gains or not.

Top dividend stocks for the next decade
Maybe you'd rather invest your hard-earned dollars in solid cash machines, rather than spending them on a new truck or a dishwasher. If so, we've got you covered. The smartest investors know that dividend stocks simply crush their non-dividend-paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Anders Bylund has no position in any stocks mentioned. The Motley Fool recommends Ford and Home Depot. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers