A Disappointing 3rd Quarter for the Furniture Industry - Unemployment Rates and Consumer Confidence
This is the third factoid in a series of five factoids detailing the weakened 3rd quarter of 2016. The first quarter of 2016 in the furniture and bedding industry started off continuing the 5 percent plus growth over the previous year for all quarters in 2015. But as the year wore on, subsequent quarters did not perform to those levels. Quarter two fell to 3.7 percent growth and quarter three fell to 3.0 percent growth over quarter the same quarters of 2015. Year-end sales in 2015 totaled $92.5 billion. Third quarter year-to-date industry sales reached $71.5 billion, a 3.0 percent increase over the first three quarters last year.
The furniture industry, aside from demographics, is driven by economic influencers and catalysts. The previous factoid detailed 2 year quarterly growth of the Gross Domestic Product, Payroll Employment, and Consumer Price Index. This factoid focuses on possible influences of Unemployment Rates and Consumer Confidence.
Over the last five years, the Unemployment Rate has declined rapidly – dropping from 9 percent to 5 percent. From 2011 to 2015, the third quarter each year has decreased an average of 1.0 percentage points. Although only slightly moving 0.2 percentage points from 2015 Q3 (5.2 percent) to 2016 Q3 (5.0 percent), employment is now at pre-recession levels.
Consumer Confidence has not moved more than 6 points in any quarter over the last two years hovering from 95 to 101. A confidence level of 100 usually indicates neither extreme confidence nor lack thereof. The year 1985 was chosen by the Conference Board as the base index of 100 because that the year showed neither a peak nor trough in the business cycle. Consumer Confidence was at its highest in the year 2000 at 139. Conversely, Consumer Confidence was at its lowest of 39 at the bottom of the last recession in 2009.
Source: *U.S. Bureau of Labor Statistics; **Conference Boards Consumer Confidence Index, 2016Q4 includes only October