The data centre boom dominates all discussion of the US economy. It drives the irrepressible stock market, lifts demand for electricity and keeps companies that make everything from generators to cooling systems working flat out. Investment in computer equipment contributed 0.9 percentage points of growth to annualised real GDP in the first quarter, when total growth was 1.6 per cent.
We should not be hypnotised by one booming sector, however. There is another US corporate economy that looks very different: focused on consumption, not investment; viciously competitive; struggling for investor attention and hardly growing.
For a lens on this other economy, look to the consumer packaged goods industry. These companies sell goods we all need, from detergent to cereal, under strong brands and with sophisticated marketing. But they are growing at less than the rate of GDP. Data from Adam Josephson of Sakonnet Research shows that average sales volumes at 15 of the largest US staples companies — Coca-Cola, Procter & Gamble, Hershey — have been negative in 13 of the last 18 quarters. Including dividends, the S&P 500 household products and food products sectors have returned 2 and minus 6 per cent respectively over the past five years.