EXECUTIVE SUMMARY
New orders were down 1% in May 2025 compared to May 2024. However, new orders were up 11% compared to the prior month of April 2025. Year to date through May 2025, new orders are now down 3% compared to 2024.
Shipments were down 2% in May 2025 compared to May 2024, while shipments were flat with the prior month of April 2025. Year to date through May 2025, shipments are now down 1% compared to 2024.
May 2025 backlogs were again down 10% compared to May 2024, but up 2% from April 2025.
Receivable levels were down 6% from April 2025, and down 2% from May 2024.
Inventories and employee/payroll levels are again materially in line with recent months and the prior year, However, with the gradual decline in employees, it does appear companies are allowing some normal attrition to occur without rushing to find replacements.
National
Consumer Confidence
The Conference Board Consumer Confidence Index® improved by 2.0 points in July to 97.2 (1985=100), from 95.2 in June (revised up by 2.2 points).
The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—fell 1.5 points to 131.5.
The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—rose 4.5 points to 74.4. But expectations remained below the threshold of 80 that typically signals a recession ahead for the sixth consecutive month.
“Consumer confidence has stabilized since May, rebounding from April’s plunge, but remains below last year’s heady levels,” said Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board. “In July, pessimism about the future receded somewhat, leading to a slight improvement in overall confidence. All three components of the Expectation Index improved, with consumers feeling less pessimistic about future business conditions and employment, and more optimistic about future income. Meanwhile, consumers’ assessment of the present situation was little changed. They were a tad more positive about current business conditions in July than in June. However, their appraisal of current job availability weakened for the seventh consecutive month, reaching its lowest level since March 2021. Notably, 18.9% of consumers indicated that jobs were hard to get in July, up from 14.5% in January.”
Purchasing plans for cars and homes declined in July but remained stable on a 6- month moving average basis. Consumers’ plans for purchasing big-ticket items were mixed, especially for appliances, while plans to buy most electronic goods ticked up slightly.
Housing
Existing-home sales decreased by 2.7% in June, according to the National Association of REALTORS® Existing-Home Sales Report. The Report provides the real estate ecosystem, including agents and homebuyers and sellers, with data on the level of home sales, price, and inventory.
Month-over-month sales declined in the Northeast, Midwest and South and rose modestly in the West. Year-over-year, sales fell in the Northeast and West, while rising in the Midwest and South.
“Multiple years of undersupply are driving the record high home price. Home construction continues to lag population growth. This is holding back first-time home buyers from entering the market. More supply is needed to increase the share of first-time homebuyers in the coming years even though some markets appear to have a temporary oversupply at the moment” said NAR Chief Economist Lawrence Yun.
“Expanding participation in the housing market will increase the mobility of the workforce and drive economic growth. If mortgage rates decrease in the second half of this year, expect home sales to increase across the country due to strong income growth, healthy inventory, and a record-high number of jobs.”
Total Existing-Home Sales for June
- 2.7% decrease in total existing-home sales month-over-month to a seasonally adjusted annual rate of 3.93 million.
- No change in sales year-over-year.
Single-Family-Homes Sales in June
- 3% decrease in sales to a seasonally adjusted annual rate of 3.57 million, up 0.6% from June 2024.
- $441,500: Median home price in June, up 2% from June 2024.
Condominiums and Co-ops Sales in June
- No change in sales, a seasonally adjusted annual rate of 360,000 units, down 5.3% from June 2024.
- $374,500: Median price, up 0.8% from June 2024.
Mortgage Rates
- 6.75%: Average 30-year fixed-rate mortgage as of July 17 according to Freddie Mac, up from 6.72% one week before and down from 6.77% one year ago.
Sales of new single-family houses in June 2025 were at a seasonally-adjusted annual rate of 627,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.6% above the May 2025 rate of 623,000, and is 6.6% below the June 2024 rate of 671,000.
Compared to June 2024 on a seasonally-adjusted basis, sales were down 6.3% overall with sales also down 4.4% in the South, down 34.4% in the Northeast, and down 14.4% in the West, but up 9.0% in the Midwest.
Other
Real gross domestic product (GDP) increased at an annual rate of 3.0% in the second quarter of 2025 (April, May, and June), according to the advance estimate released by the U.S. Bureau of Economic Analysis. In the first quarter, real GDP decreased 0.5%.
The increase in real GDP in the second quarter primarily reflected a decrease in imports, which are a subtraction in the calculation of GDP, and an increase in consumer spending. These movements were partly offset by decreases in investment and exports.
Compared to the first quarter, the upturn in real GDP in the second quarter primarily reflected a downturn in imports and an acceleration in consumer spending that were partly offset by a downturn in investment.
Sales at furniture and home furnishings stores in June 2025 were flat compared to May 2025 on a seasonally-adjusted basis, but up 4.5% from June 2024. Year to date on a non-adjusted basis, sales were up 5.7% (6.8% last month).
Thoughts
It was really good to see May’s 11% average increase in month-over-month new orders for participants in our survey after last month’s 7% decline, which when averaged out seems more in line with earlier months and other industry reporting.
This month we saw consumer confidence at least begin to stabilize, and some positive trends with GDP, but housing continues to bump along while the Fed again takes a wait and see approach on inflation and rate cuts during its July meeting.
Dealing with the ever-evolving tariff landscape continues to be top of mind for suppliers and retailers alike, but that picture is seemingly coming more and more into focus with the latest round of tariff announcements, though China remains the wild card.
After about six months of uncertainty, we are hopeful this will provide consumers with a return to some sense of normalcy and the direction the industry needs to effectively operate and capitalize on the many positive factors and opportunities that remain in the market for the remainder of the year and beyond.
MARK LAFERRIERE, Assurance PartnerMark has nearly 25 years of experience working in broad-based public accounting. He is an integral member of the firm’s Furniture practice group and provides various assurance services for manufacturing, distribution, and transportation clients. He also a member of the Employee Benefit Plan group. |
