Straining to see light at end of the tunnel
Jerry Epperson -- Furniture Today, July 6, 2009
I seem to spend a lot of my time verbally holding hands with various industry participants, assuring them the furniture industry has a future. Sometimes it is like operating a suicide hotline. But who can I call?
Watching this economy day-to-day is a challenge, and the stock market goes from euphoria to horror without shame.
On June 17, one of the headlines blared “The Recession Is Over!” according to Liz Ann Sonders, the chief investment strategist at Charles Schwab. Further, Ms. Sonders believes the second quarter GDP could be marginally positive.
By my last count, Ms. Sonders stands alone with the majority of economists calling for a trough in the economy later this year or maybe early next year, except for those who see it happening late next year or in 2011 or 2012. If she was running at Churchill Downs, she would be at 52 to 1, but a heavy crowd favorite.
By the way, she also sees a “reasonable risk” of a double-dip recession. Shoot me now.
President Obama just noted our unemployment rate will exceed 10%, a big jump over the 8% he predicted a few months ago. The all-powerful Federal Reserve “thinks” the economy is still declining but at a lower rate. In other words it is “less bad,” which is supposed to be encouraging.
New unemployment claims went down a couple weeks ago, and home construction showed a 17% gain off a ridiculous low — both straws barely worth a grasp.
I am not a doctor but I play one in our industry, and my diagnosis is that we are all tired, frustrated, agitated and our eyes are exhausted from trying to find our economic tunnel's light. And we do not have a cat to kick (or dog, or whatever you and your conscience allow you to kick).
Several times in my career, I have seen our industry drop when others were still growing handsomely. Why? We usually never know, but we have lots of company in the current slide. Except for Wal-Mart, Kmart, the “dollar” stores, bankruptcy lawyers and a precious few others, this economic downturn does not discriminate.
Just to add some swine flu to your modest cold, after a promising Memorial Day for furniture sales, June appears to have taken a turn for the worse. Nuts.
All that said, take a look at most of the public companies and compared to their revenue declines, their losses are a pleasant surprise, running lower than you would expect.
And La-Z-Boy just reported a profit for its April quarter! Profit. Remember that word?
Maybe all the unemployed want to be comfortable.
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