The best way to measure how people feel about the economy doesn’t involve any survey or index. Just watch what they do with their money.
Lately, it is clear they are spending more of it. Retailers across the country reported terrific business results during the very recent five-week period ended March 31. North America’s warmest March in 50 years certainly helped, but it was the nation’s economic spring thaw that really drove sales higher.
That strength was on full display at TJX Cos., the Framingham company that operates TJ Maxx, Marshalls and other stores. If activity at Framingham office supply giant Staples Inc. measures the pulse of small businesses, sales at TJX tell you a lot about how a broader sample of people feel about their jobs and their wallets.
TJX sales for those five weeks jumped 13 percent, while same-store sales - a fairer measure of customer sentiment and activity - climbed 10 percent. Those are big numbers - about double the rise stock analysts had forecast - for a company generating sales around $23 billion a year.
It was no coincidence that TJX shares reached a record high yesterday, advancing 93 cents to $40.29. The company’s total stock market value also ended the day at more than $30 billion for the first time. The improved March results had prompted TJX to increase its forecasts for quarterly earnings per share by about 10 percent.
People go shopping for lots of reasons, and nice weather is certainly one of them. No one doubts the balmy March temperatures had an impact on sales at all kinds of stores. But TJX went out of its way to point out that the company’s business was also up at stores in areas where “the weather is typically warm.’’
TJX sales are not a perfect measuring stick for consumer sentiment in the early stages of an economic recovery - if that is what we are really experiencing - because off-price retailers tend to do relatively well in tough times that turn every shopper into a bargain hunter.
But I was struck by the progression of gains in TJX’s monthly same-store sales figures dating to last fall, when economic statistics first produced reasons for optimism.
TJX revenues were growing last October, but same-store sales only increased by about 3 percent over the same month of the previous year. Business was a bit better in November, up 4 percent. December was better still - up 8 percent - and in January, 7 percent. By February, TJX was reporting same-store sales increases of 9 percent, and the latest figures for March are even higher.
Connect all those dots and you will see an encouraging picture of retail business and personal spending decisions growing slowly, but steadily.
Sales activity for March, as reported yesterday by a variety of retailers, was uniformly good and consistently above projections from analysts - and often from the companies themselves. That includes Target Corp., Gap Inc., Limited Brands Inc., and Macy’s Inc. One caveat: Some of those companies may have gotten a small March boost from an early Easter this year.
But many of retailers reported monthly same-store sales gains in the range of 8 percent, and Retail Metrics, a data company in Swampscott, reported a 3.9 percent gain for more than 20 companies it tracks.
There are lots of numbers and reports suggesting the economy is gaining real momentum right now, from consumer confidence surveys to factory production data and employment updates. I’m most encouraged by the numbers that show people are deciding to spend a little more money.
The Red Herring
This is what it’s come to at A123 Systems Inc.: The Waltham battery company produced one of the stock market’s biggest percentage gains of the day but still could not finish the session over a buck a share. The company, trying to bounce back from a $55 million product-recall disaster, saw its shares rally 16 percent to close at 95 cents each. The news of the day: Alliance Bernstein, A123’s biggest stockholder, increased its stake in the company to 10.1 percent.
A123, which went public to great fanfare in 2009 at a price of $13.50, became a penny stock for the first time this week.