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From Home Furnishing Business

Smith Leonard Releases December Home Furnishings Insights

December 30, 2025  by Karen Parrish in Business Strategy, Industry   

EXECUTIVE SUMMARY

New orders were down 8% compared to the prior month of September 2025 (following the 15% increase from August 2025). New orders were also down 1% in October 2025 compared to October 2024. However, year to date through October 2025, new orders remain flat compared to 2024.

Shipments were up 2% compared to the prior month of September 2025 and up 4% compared to October 2024. Year to date through October 2025, shipments have now pulled even compared to 2024. October 2025 backlogs were down 2% compared to October 2024, and down 3% from September 2025.

Receivable levels were up 4% from September 2025, but down 2% from October 2024. Inventories were up 1% from September 2025 and up 4% from October 2024. Payrolls were up 3% compared to September 2025 and up 5% compared to October 2024, which are materially in line with shipments. Employee levels are again materially in line with recent months and the prior year.

Consumer Confidence

The Conference Board Consumer Confidence Index® declined by 3.8 points in December to 89.1 (1985=100), from 92.9 in November. This includes an upward revision to November’s reading, as responses collected after the end of the federal government shutdown (which spanned October 1 to November 12) were more positive than those collected during the impasse.

The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—plummeted by 9.5 points to 116.8 in December.

The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—held steady at 70.7. The Expectations Index has now tracked under 80 for 11 consecutive months, the threshold below which the gauge signals recession ahead.

“Despite an upward revision in November related to the end of the shutdown, consumer confidence fell again in December and remained well below this year’s January peak. Four of five components of the overall index fell, while one was at a level signaling notable weakness,” said Dana M Peterson, chief economist, The Conference Board.

Peterson added: “Consumers’ write-in responses on factors affecting the economy continued to be led by references to prices and inflation, tariffs and trade, and politics. However, December saw increases in mentions of immigration, war, and topics related to personal finances—including interest rates, taxes and income, banks, and insurance. The responses continued to skew pessimistic but less so than November, potentially due to fewer negative comments about prices and inflation, politics, as well as a rebound in positive responses about interest rates. Notably, the Federal Reserve Board cut monetary policy rates on December 10 for a third time in 2025, which landed in the second half of the survey sample interval.”

Consumers appeared more cautious about plans for buying big-ticket items over the next six months. Homebuying expectations also ticked downward. Plans to buy household appliances all dipped, as did purchasing plans for PCs and laptops, as well as video game consoles. By contrast, future spending plans for smartphones, tablets, and digital cameras continued to trend upward on a six-month moving average basis. Used cars, TVs, and smartphones remained the most popular within their categories for future purchases.

Other

Real gross domestic product (GDP) increased at an annual rate of 4.3% in the third quarter of 2025 (July, August, and September), according to the initial estimate released by the U.S. Bureau of Economic Analysis. In the second quarter, real GDP increased 3.8%.

The increase in real GDP in the third quarter reflected increases in consumer spending, exports, and government spending that were partly offset by a decrease in investment. Imports, which are a subtraction in the calculation of GDP, decreased.

Compared to the second quarter, the acceleration in real GDP in the third quarter reflected a smaller decrease in investment, an acceleration in consumer spending, and upturns in exports and government spending. Imports decreased less in the third quarter.

Real final sales to private domestic purchasers, the sum of consumer spending and gross private fixed investment, increased 3.0% in the third quarter, compared with an increase of 2.9% in the second quarter.

THOUGHTS FROM SENIOR ASSURANCE PARTNER, MARK LEFERRIER

“First of all, I would like to recognize and thank Sherry White for her many years of dedication and service to our Furniture Insights program and congratulate her on her upcoming retirement. We will miss you, Sherry!”

“Monthly new orders for participants in our survey continued to alternate back and forth between increases and decreases compared to the prior year (-1%, +7%, -3%, +13%, +3%, -1%, -9%, +1%, -5%, -3%).”

“However, year-to-date new orders and shipments through October 2025 are now even with 2024, which while nothing to write home about given calendar 2024 ended up 1% down from 2023 (which was up 5% over 2022), it is at least a positive sign given the many challenges from the first half of the year.”

“And while retail has been slow, recent industry reporting of certain key retailers shows improvement in recent months and optimism for 2026 based upon these trends and expectations of interest rates and housing for next year.”

“Here’s wishing everyone a happy and prosperous new year.”