Perhaps more encouraging this quarter is the performance of top-line sales growth. Revenues are 9% higher than they were a year ago. Again, the gains and positive surprises are widespread, with 8 out of 10 sectors exhibiting positive revenue growth and sales surprises. This improvement in top line sales is an important and necessary precondition for the economy to possibly enter a virtuous cycle, or positive feedback loop, that we have previously described. If sales can continue to improve, there’s hope that companies would begin to hire again, which would boost wage income. However, with less than half of the companies in the index having reported results, it’s too early to make any definitive judgments about the quality of earnings for the quarter. But so far the results have been encouraging.
