Call it the "Christmas light indicator.'
If it's beginning to look a lot more like Christmas in your neighborhood than it did last year, then you might agree with me that there's a certain measure of holiday optimism about that wasn't here last year, and it can be measured in lights.
Just on my drive home from CNBC headquarters in New Jersey, I notice fully ablaze neighborhoods that in other years might have had just a few brightly lit homes. There's one street, where the neighbors clearly shared the joy and decorated, every house, tree and telephone pole. There are red and white candy cane-striped tree trunks, bushes sparkling with a multitude of colors, and every front porch looks as if it's from a greeting card, wishing a warm welcome home for the holidays.
I really couldn't find any official measure to support my premise that this display of colorful lights is a valid economic indicator. So, I tried Wal-mart . A Wal-mart spokesman kindly declined to comment on sales of anything, and said Wal-mart doesn't break out holiday light sales, So, I went to the Wal-mart website, and lo and behold there were lighting displays that were already sold out, even last week. Maybe that's normal, but I bet Wal-mart will be placing a bigger order next year.
I also checked in with PSE&G, a New Jersey utility. They liked the idea that maybe lighting for the holidays was an economic indicator, but they couldn't confirm whether it helped their year end sales or whether it shows up in kilowatt hours.
So, I asked Mesirow Financial's chief economist Diane Swonk, always level-headed and always there with fact in hand. But she couldn't prove it either. However, anecdotally, she agrees with me.
"There's no question the tinsel is back on the tree," she said.
"It's the best holiday in four years in terms of growth, and we are starting to see, especially at the high end, there's a willingness to be conspicuous again," she said.
She in fact had her own story of decorating in early December. She needed new lights and had to run out to get them in the middle of decorating, and she found the type she needed were already sold out at her local store.
Jefferies analyst Daniel Binder, who follows stores like Wal-mart and Home Depot , said he has no hard numbers to prove my theory but he does a survey at the end of December that shows the trend in the sales of holiday seasonal items. We definitely will check back with him. Binder wasn't ready to jump on board the whole Christmas light indicator theory, but he did say sales of decorations should be better this year, and so should retail sales.
"'08 was pretty ugly. '09 was somewhat better, and I'm expecting 2010 to be even better," he said.
My final stop was General Electric , parent of CNBC. It happens to have a lighting division, and they do know their Christmas lights! Of course, the lights are brighter this year, they tell me. That's because there are more of the new LED lights adorning homes.
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