January 11,
2019 by Laurie Northington in General 
This year the youngest Millennials have officially become adults with the largest generation since the Baby Boomers spanning ages 18 to 36. Most researchers and studies concur the last 10 years had dealt most Millennials an increasingly difficult economic hand.
This is the final factoid in a series of three factoids that breaks the Millennial generation into three distinct segments based on proximity to the Great Recession and date of college graduation or job market entry – prior to the recession, during the recession and post-recession high unemployment period, and post-recession recovery.
Being such a large generation Millennials are starting to make their imprint on the workforce. Employed Millennial workers ages 25 to 34 are growing in number and now surpass the number of employed 35 to 44 Gen Xers. At 34.4 million post-college employed workers in 2017, Millennials are now 7.8 percent higher than Generation X in the amount of people in the workforce. Although Millennials now have the most employees in the workforce, they still lead the way with higher unemployment rates. 4.6 million 25 to 34 year-olds are unemployed compared to 3.5 million 35 to 44 year-olds and 3.2 million 45 to 54 year-olds.
While each category felt the effects of the Great Recession on the unemployment rate, those with a bachelor’s degree or higher spiked up to 4.9 percent in January of 2010 before leveling out to 2.5 percent in 2017 – just 0.4 percentage points shy of the rate in January 2007.
The percent of Millennials 25 to 34 who are “not in the labor force”, mostly students and others who are neither working nor seeking work past college age, is in line with Generation X . At 21.8 percent, the older Millennials not in the labor force are only slightly higher then the 20.9 percent designated to 35 to 44 year-olds (younger Gen Xers). However, keep in mind that many more Gen Xers are couples where one has chosen to stay at home to care for children while the other is employed.
Source: Bureau of Labor Statistics, U.S. Department of Labor, Current Population Survey
January 4,
2019 by Laurie Northington in General
This year the youngest Millennials have officially become adults with the largest generation since the Baby Boomers spanning ages 18 to 36. Most researchers and studies concur the last 10 years had dealt most Millennials an increasingly difficult economic hand.
This is the second factoid in a series of three factoids that breaks the Millennial generation into three distinct segments based on proximity to the Great Recession and date of college graduation or job market entry – prior to the recession, during the recession and post-recession high unemployment period, and post-recession recovery.
The Financial Picture
Income in all generations was negatively impacted by the recession, especially among Millennials and Gen Xers. The overall population of 25 to 34 year-olds has not fared as well as the college graduates nor have they fared as well as the older Gen Xers aged 35 to 44 in terms of salary loss. At $34,067, median income for Millennials has yet to surpass 25 to 34 year-olds in 1974 ($34,601 in real adjusted 2016 dollars). Meanwhile 35 to 44 year-old’s median income was not hit quite as hard in the recession and at $42,012 in 2016 is nearly back to the median income in 2000.
Although incomes are rising, Millennials are overwhelmed by debt. According to the Federal Reserve, the average student loan debt for Class of 2017 graduates was $39,400, up six percent from the previous year.
Americans owe over $1.48 trillion in student loan debt spread out among about 44 million borrowers. That’s about $620 billion more than the total U.S. credit card debt, according to the Federal Reserve.
The real financial picture of Millennials and student debt lies in their net worth defined as assets minus liabilities. The average net worth for a Millennial just out of college at age 23 is negative $33,984. Even with an average starting salary of $52,569, it takes many millennials a long time to crawl out of student loan debt.
Source: U.S. Census Bureau, Current Population Survey; The College Investor report by NACE, National Association of Colleges and Employers “Salary Survey Report” and
Federal Reserve Student Loan Data, Net worth – assets minus liabilities; U.S. Bureau of Economic Analysis as published in the College Investor. Data through 2015.
December 28,
2018 by Laurie Northington in General
Numerous contradictory studies have attempted to profile the very diverse Millennial generation. Some data identifies them as big spenders adding to their debt with lifestyle products and so-called life experiences. Other studies suggest they are one of the best savers of any generation at this age. But like all generations, it’s inaccurate to place blanket labels on a generation that spans almost 20 years. Where most researchers and studies do concur is that many Millennials have been dealt an increasingly difficult economic hand.
Financial data has emerged which suggests there are three distinct segments to the Millennials based on their proximity to the Great Recession – (1) those that graduated college or entered the job market prior to the Great Recession, (2) those that entered the job market during the recession or during the post-recession high-unemployment recovery period, and (3) those entering after the economy was on its way to recovery. This is the first factoid in a series of three factoids that details these 3 different segments of Millennials in relation to education, finance and employment.
Education
Those that entered the job market early, prior to the Recession, have definitely fared better than their younger Millennials. The second group hit a job market wall during the Great Recession and many have yet to recover as they took jobs unrelated to their college education at lower salaries. With the tightening of the job market, Millennials turned to colleges becoming the most educated generation in history.
29 percent of Millennial men and 36 percent of Millennial women completed at least a bachelor’s degree compared to just 15 percent of men and 9 percent of women 50 years ago. While the percentage has increased with for both sexes with each generation, women now exceed men as college graduates by 7 percent.
Some Millennials aren’t sure how much that education has helped them. The National Association of Colleges and Employers (NACE) tracks starting salaries by year of graduation and finds that 2004 through 2007, those early graduates averaged starting salaries of $42,619. Salaries in the second group graduating during the Great Recession and partial recovery, 2008 to 2011, averaged $41,607. But as the recovery has moved forward, 2012 to 2016 (most current data), starting salaries jumped to an average of $48,169.
Source: Pew Research Center’s “How Millennials today compare with their grandparents 50 years ago,” March 16 2018; U.S. Census Bureau , Current Population Survey Annual Social and Economic Supplement (ASEC)
NACE, National Association of Colleges and Employees “Salary Survey Report”
December 21,
2018 by Laurie Northington in General
The furniture industry is driven by housing: new household formations, changes of residences of existing households, and replacement or upgraded furniture within existing residences. Unfortunately, critically low inventories and subsequent skyrocketing home prices and rental rates are locking out new home buyers and stymieing moves at a time when the economy is growing and employment is high. This is the final factoid in a series of four factoids detailing the crucial struggle facing the housing market and consequentially the furniture industry.
Numerous factors have converged to create the housing shortage, one of which is the lack of construction labor. Due to a combination of many workers leaving the industry during the recession, fewer people attending trade schools and a decline in immigrants and undocumented workers, builders struggle to find workers. The amount of construction workers in residential construction fell 44.8 percent from 2006 to 2011, losing almost half of the total workers. The industry has slowly gained employees back since 2011, increasing by 39.6 percent in seven years, but is still 23 percent shy of the one million construction workers in 2006.
Source: U.S. Census Bureau
December 14,
2018 by Laurie Northington in General
The furniture industry is driven by housing: new household formations, changes of residences of existing households, and replacement or upgraded furniture within existing residences. Unfortunately, critically low inventories and subsequent skyrocketing home prices and rental rates are locking out new home buyers and stymieing moves at a time when the economy is growing and employment is high. This is the third factoid in a series of four factoids detailing the crucial struggle facing the housing market and consequentially the furniture industry.
Home prices have increased dramatically since the bottom of the recession in 2009 – jumping 46.1 percent from 2009 to 2018. With a current median home price of $328,000 (2018 April YTD), prices are 34.1 percent above the pre-recession peak of $244,950 in 2007. Since 2010, home price increases are averaging 5 percent a year (CAGR). Paired with ballooning home prices, stricter lending polices are keeping many first-time buyers out of the market.
As inventory stays low, prices will continue to go up due to many builders turning away from starter and mid-priced home and choosing to build high-end homes with better profit margins.
Source: U.S. Census Bureau
December 7,
2018 by Laurie Northington in General
The furniture industry is driven by housing: new household formations, changes of residences of existing households, and replacement or upgraded furniture within existing residences. Unfortunately, critically low inventories and subsequent skyrocketing home prices and rental rates are locking out new home buyers and stymieing moves at a time when the economy is growing and employment is high. This is the second factoid in a series of four factoids detailing the crucial struggle facing the housing market and consequentially the furniture industry.
The most critical result of the lack of new housing starts is falling housing inventories which in turn drive up prices. The number of rentals and homes for sale has been falling consistently since coming out of the recession when inventories were high. During the four-year period 2010 to 2014, rental inventories fell at an annual rate (CAGR) of 7.5 percent and housing for-sale inventories declined 10.2 percent. During the following three years, 2014 to 2017, rentals and housing inventories fell again but at a smaller annual rate of 0.4 percent and 4.8 percent respectively. This year, based on an annualized first quarter, rental inventories are down another 3.4 percent and houses for sale have declined 7.2 percent.
Source: U.S. Census Bureau, Current Population Survey/ Housing Vacancy Survey
November 30,
2018 by Laurie Northington in General
The furniture industry is driven by housing: new household formations, changes of residences of existing households, and replacement or upgraded furniture within existing residences. Unfortunately, critically low inventories and subsequent skyrocketing home prices and rental rates are locking out new home buyers and stymieing moves at a time when the economy is growing and employment is high. This is the first in a series of four factoids detailing the crucial struggle facing the housing market and consequentially the furniture industry.
Fewer homes are being built per household than at almost any time in U.S. history and home construction per household, a decade after the recession bust, remains the lowest level in 60 years of record-keeping. Adding fuel to the flame, the housing industry is not able to provide the work/lifestyle preferences of ballooning Millennial households nor affordable housing to first-time home buyers.
Since 2010, when the recovery from the recession began in full swing, the furniture industry has been consistent, averaging around 4.7 percent growth. And while the growth in housing starts appears stronger on paper compared to the lackluster growth in new household formations, the actual numbers are about the same, 6.2 million units each over the last five years, not enough to keep up with demand. Building shows signs of picking up based on first quarter starts this year (up 9.3 percent), but economists say this will do little to ease the crisis in many cities.
November 23,
2018 by Laurie Northington in General
This is the final factoid in a series of five factoids detailing the rise of e-commerce in the furniture industry. As many brick and mortar stores search for strategies to compete with giant online retailers, those same retailers are looking for ways to remain profitable.
Retail Trade Totals
Internet sales of all consumer products from all retail types of outlets, whether brick and mortar or e-commerce companies, are estimated to have reached $437.5 billion in 2017. It may be surprising to some, however, that these internet sales represent only 8.6 percent of all retail sales for all consumer products. But internet purchases continue to make major inroads into many consumer products with no sign of slowing down.
The rapid growth of furniture industry sales by successful e-commerce retailers are challenging brick and mortar stores, but traditional store fronts still offer a customer experience that an e-commerce retailer cannot. But e-commerce companies are quickly moving into areas (for example, store fronts and print catalogs) to challenge the customer experience of traditional brick and mortar retailer.
November 16,
2018 by Laurie Northington in General
This is the fourth factoid in a series of five factoids detailing the rise of e-commerce in the furniture industry. As many brick and mortar stores search for strategies to compete with giant online retailers, those same retailers are looking for ways to remain profitable.
E-commerce Retailers
E-commerce retailers are defined as companies without physical stores competing with brick and mortar establishments. Sales of combined furniture and home furnishings through e-commerce retailers have increased from $7.9 billion in 2006 to an estimated $46.3 billion in 11 years (2006 to 2017) – a growth of 486 percent.
Growing at an average annual rate (CAGR) of 17.4 percent a year, e-commerce furniture and home furnishings retailers show no signs of slowing down. The two giants in the industry, Amazon and Wayfair, are both looking at ways to incorporate brick and mortar stores into their portfolios. These companies see the desire held by a majority of consumers to see especially higher ticket furniture items in person before making the leap to buy. Along with Wayfair’s entry into the print catalog business, according to Boston Magazine, the company is looking to open its first showroom in an old Marshall’s storefront in downtown Boston. Rather than resist the looming presence of Amazon, mattress manufacturer Tuft & Needle has partnered with the online company to expand its brick and mortar stores using Amazon technology and selling various Amazon products in the stores. These moves could put more stress on traditional furniture retailers.
In addition to furniture and home furnishings, other consumer merchandise lines dramatically increased sales through e-commerce retailers. At $59.1 billion in sales, clothing/footwear leads e-commerce retailer sales in 2016 up from $12.9 billion in 2006 – skyrocketing 358 percent. Although not as high as clothing/footwear, furniture and home furnishings experienced the highest growth among e-commerce retailers over two years 2014 to 2016 – jumping 54 percent. Sporting goods sold through e-commerce retailers also continue a positive trajectory, increasing 44 percent in two years and passing the slower growing computer hardware merchandise line.
Source: U.S. Census Bureau, 2017 estimates by Impact Consulting Services Inc’s proprietary FurnitureCore model. All years have been revised by the Census Bureau in March 2018. *data for 2017 is not yet available.
November 9,
2018 by Laurie Northington in General
This is the third factoid in a series of five factoids detailing the rise of e-commerce in the furniture industry. As many brick and mortar stores search for strategies to compete with giant online retailers, those same retailers are looking for ways to remain profitable.
Brick and Mortar Stores E-commerce
While the success of online retailing among brick and mortar merchants has increased over the years, the e-commerce sales comparison remains vast between brick and mortar stores and pure e-commerce retailers. E-commerce sales among combined furniture and home furnishings stores jumped 200 percent from $367 million to $1.1 billion 2006 to 2016 but furniture stores only held one percent of that volume. (Note: 2017 data has not yet been released.)
Comparing combined furniture and home furnishings stores to other retail brick and mortar companies, furniture and home furnishings stores lag behind in percent of e-commerce sales to total sales but has shown 25 percent growth from 2014 to 2016. Just reaching 3.0 percent in 2016, clothing and clothing accessories stores have the highest volume of e-commerce sales as a percent of total sales among brick and mortar retail store types.
Mail Order Retailers
Technically the mail order business is a small part of the furniture industry but the lines between mail order and e-commerce are blurring and print catalogs are making somewhat of a comeback as another media to reach out and touch the consumer. Data from the Census Bureau and Impact Consulting’s FurnitureCore.com industry model estimates the furniture mail order business at $2.3 billion in 2017, only 2.2 percent of industry sales. These sales were flat compared to the previous year. And according to the U.S. Postal Service and research by Data & Marketing Assn., in 2016, consumers are getting fewer catalogs in the mail compared to the glory days. In 2016 9.8 billion catalogs of all types reached American mailboxes compared to double that amount in 2007.
Despite the gloomy statistics, last year saw evidence that print catalogs are resurging but not in traditional mail order formats. For example, home furnishings e-commerce giant Wayfair produced its first print catalog at the end of 2016 and continues to roll them out. Wayfair claims its catalogs are meant to inspire a lifestyle as opposed to promoting a brand.
Research points to several reasons print catalogs are growing. First, consumers are getting less and less mail overall as the “paperless” movement has become popular and therefore catalogs now stand out in consumer mailboxes. Also, the advertising clutter in email boxes along with saturation in social media has driven companies to give the old fashioned catalog another look. Plus, software ad blockers are causing fewer marketing messages to actually reach the consumer. And finally, research by Data & Marketing Assn. suggests simply that Millennials really do like them.