EXECUTIVE SUMMARY

New orders were down 9% in September 2024 compared to September 2023, which follows the 7% year over year decline last month. However, new orders were up 5% compared to the prior month of August 2024. Year to date through September 2024, new orders are now even compared to 2023.

September 2024 shipments were down 7% from September 2023, and also down 7% from August 2024. Year to date through September 2024, shipments are down 8% compared to 2023.

September 2024 backlogs were down 10% compared to September 2023, but up 1% from August 2024.

Receivable levels were down 1% from August 2024, and down 8% from September 2023, both of which are materially in line with the respective shipment trends.

Inventories and employee/payroll levels are again materially in line with recent months, but down from 2023, indicating that companies have aligned levels to match current operations.

National

Consumer Confidence

The Conference Board Consumer Confidence Index® increased in November to 111.7 (1985=100), up 2.1 points from 109.6 in October.

The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—increased by 4.8 points to 140.9.

The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions— ticked up 0.4 points to 92.3, well above the threshold of 80 that usually signals a recession ahead.
“Consumer confidence continued to improve in November and reached the top of the range that has prevailed over the past two years,” said Dana M. Peterson, Chief Economist at The Conference Board. “November’s increase was mainly driven by more positive consumer assessments of the present situation, particularly regarding the labor market. Compared to October, consumers were also substantially more optimistic about future job availability, which reached its highest level in almost three years. Meanwhile, consumers’ expectations about future business conditions were unchanged and they were slightly less positive about future income.”

On a six-month moving average basis, purchasing plans for homes stalled in November, while purchasing plans for autos were up slightly. When asked about plans to buy more durable goods or services over the next six months, consumers continued to express a slightly greater preference for purchasing goods. In addition, more consumers expressed uncertainty about future purchases. Consumer buying plans for most appliances and electronics were down.

Housing

Existing-home sales rose in October, according to the National Association of REALTORS®. Sales improved in all four major U.S. regions. Year-over-year, sales elevated in three regions but were unchanged in the Northeast.

Total existing-home sales – completed transactions that include single family homes, townhomes, condominiums and co-ops – expanded 3.4% from September to a seasonally adjusted annual rate of 3.96 million in October. Year-over-year, sales progressed 2.9% (up from 3.85 million in October 2023).

Single-family home sales accelerated 3.5% to a seasonally adjusted annual rate of 3.58 million in October, up 4.1% from the prior year. The median existing single-family home price was $412,200 in October, up 4.1% from October 2023.

Existing condominium and co-op sales extended 2.7% in October to a seasonally adjusted annual rate of 380,000 units, down 7.3% from one year ago (410,000). The median existing condo price was $360,300 in October, up 1.6% from the previous year ($354,800).

According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.78% as of November 14. That’s down from 6.79% one week ago and 7.44% one year ago.

Sales of new single-family houses in October 2024 were at a seasonally adjusted annual rate of 610,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 17.3% below the revised September rate of 738,000 and is 9.4% below the October 2023 estimate of 673,000.

Compared to October 2023 on a seasonally-adjusted basis, sales were down 9.4% overall with sales also down 19.7% in the South and 1.3% in the West, but up 35.3% in the Northeast and 15.9% in the Midwest.

Other
Real gross domestic product (GDP) increased at an annual rate of 2.8% in the third quarter of 2024, according to the “second” estimate released by the U.S. Bureau of Economic Analysis. In the second quarter, real GDP increased 3.0%.

The increase in real GDP primarily reflected increases in consumer spending, exports, federal government spending, and nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

Compared to the second quarter, the deceleration in real GDP in the third quarter primarily reflected a downturn in private inventory investment and a larger decrease in residential fixed investment. These movements were partly offset by accelerations in exports, consumer spending, and federal government spending. Imports accelerated.

Sales at furniture and home furnishings stores were down 1.3% in October 2024 from September 2024 on a seasonally-adjusted basis, but up 1.5% from October 2023. Sales were down 3.9% for year to date October 2024 compared to the same period for 2023 on an unadjusted basis.

Thoughts

I hope everyone here in the States had a relaxing and enjoyable Thanksgiving holiday.

This month, we saw a few of the national economic indicators trending in the right direction, particularly Consumer Confidence and existing-home sales, though new residential housing activity continues to lag behind. These gains will need to be sustained to meaningfully filter down to the furniture industry, as we continue to see a decline in current orders and shipments for participants in our survey compared to a year ago. However, a review of recent public company results does provide some hope in that the year over year declines have narrowed in their last quarterly filings on average.

Early reporting on Black Friday indicates that activity was up overall, though online purchases made up for the reduction at brick-and-mortar retail.

We also saw another 0.25% interest rate cut in November, which followed the 0.50% in September. The Fed meets again in mid- December, so it will be interesting to see how they approach possible tariffs and the potential impact on inflation, future interest rate adjustments, and ultimately housing that drives so much activity in the industry.

While we have seen most of our clients significantly reduce their reliance on China produced goods over the last 10 to 15 years, there is still little doubt that tariffs will be disruptive to the overall industry, providing both challenges and opportunities.

I suppose no one can say we don’t live in interesting times.

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