Planes and Automobiles

Judging from headlines, most folks remain unconvinced of the US and global economy’s health. Yet, economic data largely continue to paint a picture of a healthier-than-perceived economy. With 2013 off and running, here are just a few (of myriad) examples.

Total passenger air traffic in November rose 4.6% from a year ago, while total freight traffic rose 1.6%. Specifically, strong growth in Emerging Markets and resilience in North American air traffic helped buoy the results. While these data can be volatile, it’s likely November’s result represents the trend more than the exception—nearly every category measured showed growth. While some areas were weak (freight travel in Europe, for example) this likely isn’t a surprise to most folks and serves to reinforce the notion areas of strength and weakness exist in the economy, as they nearly always do. Still, overall increasing passenger and freight travel is inconsistent with an economy in or about to enter the dumps.

Another factor that likely went overall underappreciated—December auto sales rose 13% annualized to 15.4 million units. Again, such big ticket purchases aren’t consistent with the broad perception the world is so very troubled and consumers overall pushing up daisies.

2013 expectations are for auto sales to decelerate slightly, but it’s likely these estimates are still tied to too dour forecasts on consumer’s health. As we’ve often pointed out, consumers aren’t nearly as fragile as many would have you believe. Recall, personal consumption expenditures (the largest component of GDP) continued to climb in Q3. Likewise, the average age of US cars is near all-time highs (11 years), meaning many folks likely look to trade these in for newer models in the coming year as well.