LONDON -- It's a presidential election year in America, which means that the economic news will increasingly be spun by both sides to favor their candidate. But the complex nature of modern economies often means that the official statistics for economic growth and other indicators will be substantially reviewed after publication, so sometimes we need to look for other measures of economic performance.

I believe that corporate results can sometimes be a much better indicator as to the state of a country's economy. The headline earnings figures aren't necessarily the place to look; instead it's the information about sales, bad debts, and consumer confidence that's often of greater interest.

Corporate America is currently in the middle of a quarterly reporting season, during which time a large number of companies have produced figures that indicate that the economy is doing much better than the gloom and doom merchants are saying.

Building America
One of the bellwethers of the American economy is its largest railroad, Union Pacific (NYSE: UNP), which celebrates its 150th birthday in July. Union Pacific gets roughly 95% of its income from moving freight in the Midwestern and Western states, as well as to and from ports on the West Coast and the Gulf of Mexico. So its freight statistics tell us a lot about the level of demand from America's consumers and businesses, as well as the demand for its exports.

Union Pacific's first-quarter results showed a 1.3% increase in shipping volumes, with a 12% rise in sales per car. Of particular interest were the strong gains in automobiles (+15%) and industrial products (+10%). Since new car sales fall off a cliff when the economy is struggling, this is a strong indicator of increasing consumer confidence.

The other major publicly quoted railroads such as CSX (NYSE: CSX) have also seen similar improvements, but as often happens the market has largely focused upon the one negative factor: an 8% decline in energy carloads due to declining coal shipments.

Falling coal sales have been used to support the argument that America is slipping back into recession, though I believe that it this is more to do with the increasing use of shale gas and environmental regulations which are reducing the demand for coal. Also, it's in the interest of one political party to claim that the country is entering a recession.

More indicators
A very strong signal about improving consumer finances was sent out by Bank of America (NYSE: BAC) where there was a big decline in the amount being set aside for mortgage repossession losses, which fell to pre-credit-crunch levels.

Another business that, like Union Pacific, touches many parts of the American economy is the financial services company American Express (NYSE: AXP). Two things leapt out at me from its results: a 12% rise in the amount that consumers charged to their American Express cards, and the phrase, "Credit quality continues to be among the best we have ever experienced."

Clearly, America's shoppers are back in business and they are settling their accounts.

Fast-food nation
Another interesting statistic comes from the results for the fast-food giant Yum! Brands (NYSE: YUM), which showed a 5% increase in American same-store sales where associated profits rose by 27%. This is in contrast to the last few years where fast-food sales have remained fairly static as consumers reined in their spending.

This is an important indicator because eating out is one of the first things that people cut back upon in an economic downturn, so any improvement in this area is a good sign that consumer confidence is rising.

While the vast majority of Yum! Brands' future growth is going to come from its ongoing expansion into the emerging market countries, particularly China and India (which is why Yum! is one of my larger holdings), I always keep an eye on its American sales as these reflect on the wider economy.

For the rest of the year I'd prefer to concentrate on corporate results and announcements, as America's public economic statistics will become part of the battlefield between two increasingly polarized political parties, and their supporters in the media, who are trying to get their candidate into the White House.

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