We’re just as glad as anybody to see the Dow Jones Industrial Average scaling new heights. But of course this doesn’t necessarily tell us much about the “real” economy, especially since there’s much debate over whether the Dow is a lagging or leading indicator of same.
For a good read on that, it’s worth listening to a couple of telling details from General Motors’ February sales update issued a few days ago, in which the company detailed a surge in sales of its Silverado pickup truck.
Turning to Silverado, we had a strong month once again with sales up 29%. Our small business sales were a big part of the truck story in February, just like they were in January. Sales to these business customers who typically buy one to four vehicles at a time were up 40% year-over-year. That’s a strong vote of confidence in the underlying economy.
We’re pretty skeptical about the way US small-business owners get deified as job-creating gods by the press and political classes. Economists have pointed out that the jobs small businesses create are often for shorter stints, lower pay and fewer benefits. But the most recent findings do indeed support the contention that small firms are disproportionate job creators, even if they’re also disproportionate job destroyers. So a boost in sales of light trucks—which skew heavily towards small-business owners, especially those related to the construction industry—is at least a temporary piece of good news.