And yes, with revenues of $18 billion for the month, Wal-Mart's a pretty good proxy. Management called the sales "exceptional," noting they were substantially above its forecasts. This represents a bit of a change over the last several months, as the company's results had been slightly disappointing.
I'm not sure what we can gather from this news, but some things are really striking. First and foremost, Wal-Mart continues to seem impervious to the law of large numbers. When a company with annual revenues approaching $200 billion can continue to grow top line at a double-digit rate, even for shorter periods of time, that's astounding.
But these results are in line with other big retailers announcing big gains -- from Nordstrom
In the longer term, could this possibly be a good thing? Americans certainly feel wealthier than they did last year at this time, and most consumer-confidence experts place a great amount of correlation in spending and job security. This flies in the face of the "jobless recovery" that we've heard so much about over the last year, as economic growth rates have not apparently been attended by a growth in jobs.
And yet, consumers spend. Certainly the burgeoning stock market has helped, as have the hundreds of billions of dollars that the cash-out refinancing spree in 2002 and early 2003 generated. But 2003 also saw a record number of American households declaring bankruptcy, and the level of consumer debt per household continues to skyrocket.
We don't know what will happen, but this strikes me as a very dangerous bet -- that a rising economy will cure the sins of overspending. It's easy to get excited by the news of a continued recovery and a stock market that rises on a daily basis, but some equanimity is perhaps prudent.
Wal-Mart sales rose substantially in January. While this may be a boon for the company and its shareholders, the source of many of those dollars continues to be a bit of a concern. Money spent before it is earned must always be repaid, something that is rarely discussed each time some news organization trumpets the rising consumer confidence number or spending increases. The link between this element and rising personal bankruptcies is quite substantial, but given the substantial interests that deeply need consumers to keep on spending, there isn't much profit in making this connection for people.
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