US retail sales data for December came in stronger than expected on Wednesday (Jan. 17), with purchases jumping 0.6% from November to $615 million instead of the mere 0.4% that forecasters had predicted. In year-over-year terms, there’s been a bit of acceleration—to 5% growth—after nearly a year of cooling off following the post-covid-19-vaccine explosion of spending.
It’s just like “Billion Dollar Limited,” a 1942 Superman cartoon.
In the cartoon, one from a series of Technicolor shorts, a train carrying $1 billion in gold is heading for the US Mint. The train is the economy, and getting it where it needs to go means averting widespread suffering. But robbers (a recession) want the gold. Scary!
The train takes off, and the robbers’ first course of action to acquire the gold is to commandeer the train (the pandemic) and steer it into a warehouse full of explosives (massive job loss, production grinding to a halt, etc.). This looks like a job for Superman!
Superman, in this case, is either the Federal Reserve or the US consumer of fiscal stimulus, depending on how powerful you think monetary policy is. In either case, Superman rushes over and bends the tracks so the train can carry on. Interest rate cuts? People getting their shots and rushing to reopen everything that had been closed in the interest of public health (to the detriment of public health)? Life-saving, poverty-reducing financial lifelines? Heck yeah!
A series of further calamities
But the robbers are still going after the train. They blow up a bridge the train is spanning, and Superman spirits it away before it hits the valley floor. Then they throw a bomb into the train’s locomotive. Superman rescues Lois Lane, who’s covering the train’s journey for a Daily Globe story, then rushes to stop the train from rolling downhill towards the blown-out bridge. How did the robbers get access to so many powerful explosives? It’s hard to say. But the post-covid economy has faced so many powerful challenges!
- Supply chains had been broken
- The workers who stitch together those supply chains were tired of stressful, awful jobs and couldn’t be paid enough to come back
- The products at the end of those supply chains started getting really expensive really quickly because there wasn’t enough stuff to go around
But Superman, who is also tear-gassed as he drags the train back uphill for some reason, perseveres.
- Stuff started getting made and moved around again
- The Federal Reserve started jacking up interest rates to make it harder for people to spend money
- Bosses realized they needed to start paying workers more money, who are doing their very best to spend it anyway
It’s a recovery chock-full of contradictions, like this long-in-the-tooth metaphor, but hey, the train is still choo-chooing.
A soft landing?
Because consumer spending is the lifeblood of the US economy, if things aren’t faltering there, then we have a decent shot of things turning out okay. Fewer members of the National Association for Business Economists are expecting a recession this year. Consumers are feeling more optimistic too! In short, there’s an increasingly good chance the robbers aren’t going to get the gold.
In the cartoon, Superman does get the train the US Mint. Hopefully we’ll be so lucky.