Economy shows negative signs, but consumers remain positive

The economy has shown some negative signs in early May, but consumers remain confident in future gains. Should the economy see accelerated growth, as Americans believe, wholesalers could have a need for purchase order financing

Initial jobless claims rose to a six-week high in the week ending May 11, increasing by 32,000 applications to 360,000 filings, according to the U.S. Department of Labor. The rise in applications for jobless benefits was higher than any projection by economists surveyed by Bloomberg. 

"It's possible that we could get a little bit more firing as the economy slows down in the second quarter," Gennadiy Goldberg, U.S. strategist at TD Securities, told Bloomberg. "Volatility aside, the layoff part of the equation still looks positive. It looks more like employers aren't very keen to fire workers but they are keen to reduce hours."

Another worrisome sign for the economy was the steep drop in consumer prices, led by a major decline in the price for gasoline. 

Paul Dales, economist with Capital Economics, told Reuters that further drops in consumer prices could lead to concerns "about very low inflation, or even deflation."

Despite these negative signs, consumers are still optimistic about the recovery of the economy. According to Fannie Mae's latest National Housing Survey, the share of respondents who believe the economy is on the right track increased four percentage points.

If the economy pushes through the increase in jobless applications, and the fall in consumer prices, to accelerated growth, many industries could see additional business, including wholesalers. 

As a result, these companies could begin to receive orders larger than they are used to, which could pose a problem, as smaller businesses might not have the available capital or resources to fill big orders on their own. 

However, purchase order financing is available to wholesalers of this size, which can provide them with 100 percent of the funds needed to fill an order without having to sell equity in their company.