The surprisingly strong January employment report last week was a welcome sign of improvement in the overall U.S. economic picture. The timing couldn’t be better, with the Miami International Boat Show and the Yacht & Brokerage Show starting next Thursday, Feb. 16.
Perhaps the positive headlines will stir some “animal spirits” among would-be buyers still holding back, given the continued global uncertainty and its effect on consumer confidence, a key driver of boat sales.
The good news first: The unemployment rate fell to 8.3 percent, from 8.5 percent in December, as employers added 243,000 jobs. The rate declined for the fifth consecutive month, to the lowest level, according to The Wall Street Journal, since President Obama’s first full month in office. The number was well above expectations, and the markets reacted positively.
The Dow closed last Friday at its highest point since May 2008, several months before Lehman Brothers collapsed. And the technology-heavy Nasdaq registered its highest close Friday since December 2000.
“The lack of hiring has been the missing link in this recovery,” Mark Zandi, chief economist for Moody’s Analytics, told reporters. “We may have found the missing link.”
The sobering news: There are still 12.8 million unemployed Americans, and 5.5 million of them have been out of work for at least six months, according to Calculated Risk, a respected economics blog.
Potential pitfalls? A European meltdown, a softening in China, a dustup with Iran and the ensuing impact on oil prices. (Interesting factoid: The WSJ reported that U.S. oil demand reached a 13-year low in late January.)
Those concerns continue to make consumers jittery, although of late there seems to be a greater resilience on this side of the pond in regard to European sovereign-debt worries.
“ ‘Fear’ has arguably been the biggest hurdle to stronger economic growth so far in this recovery, and the prospect of rising confidence might be the best sign yet that the U.S. recovery will sustain and broaden,” James Paulsen, Wells Capital Management chief investment strategist, recently told clients.
Perhaps somewhat quieter waters and the so-called wealth effect will serve to nudge the boating faithful off their perches and into serious conversations about buying — new and used.
“Pent-up demand clearly exists for both new and preowned,” NMMA president Thom Dammrich told me several weeks ago. “Most new boaters enter boating through the preowned market, but half of the people who sell their preowned boat to a new boater end up buying a new boat.”
Look for daily coverage of the Miami shows next week.