Disconnect: Our reality, government's sales data
Jerry Epperson -- Furniture Today, September 10, 2007
I got a call the other day from a high-ranking government economist who had read that I disagreed vigorously with the 2007 furniture retail sales data from the U.S. Department of Commerce. Do you believe furniture and bedding retail sales grew 4.4% in the March quarter? Or 2.5% in the June quarter?
We have disagreed with various data over the years, but this year the evidence is overwhelming. Yes, bedding sales are up, but bedding is about 9% of total furniture and bedding sales.
Look at public furniture company revenues for the past six months: Bassett, down 14.5%; Chromcraft-Revington, down 22.7%; Ethan Allen, down 6.3%; Flexsteel, down 1.9%; Furniture Brands, down 12.2%; Havertys, down 9.9%; La-Z-Boy, down 9%; and Stanley, down 11.3%. (We left out Hooker because of a change in its fiscal year.)
See a trend? Could it be clearer? The only public companies that have shown sales gains were bedding companies, as mentioned earlier.
Readers know how our business really is, and I do not need to repeat it here. Unfortunately, if decision-makers in Washington don't have accurate inputs, their decisions suffer.
I've been collecting statistics on this industry for over 35 years, and I believe we have the best statistical information ever, much of it thanks to Furniture/Today and the associations. That's why the recent disconnect between our reality and the government's statistics concerns me so much.
Thankfully, in mid-August the Federal Reserve cut its discount rate by one-half of a percent between its scheduled meetings. That, combined with a loosening of the money supply, should help economic growth, probably early next year. In my opinion, this move reflects less concern about the anxious stock market and more concern about the mortgage mess and the need for a healthy housing sector.
We face many academic issues that could have an impact on the real world. For example, many economists are complacent about the current inflation rates of 1.5% to 2.5%. Should they be? Or is some serious inflation being masked by deflation due to currency issues and/or overcapacity, like our industry is experiencing?
U.S. labor productivity for the past decade has been excellent, but is it because of technology and systems or because much of the detail work is being done overseas, then brought into our factories and offices, so the output/labor dollar looks great?
I'm grateful that someone in Washington would call to ask how we're doing. I'll bet they're sorry they asked!
