Retailers Have Given Some Discouraging Commentary About The US Economy Mid-2014
Adam Rifkin stashed this in Economics!
Stashed in: economics
tl;dr The mid-2014 US Economy sucks. Rich people are doing fine; everyone else, notsomuch.
Bob Evans, which wrapped up its fiscal year 2014 in its most recent quarter, said its results were impacted by severe weather (an oft heard refrain during the first quarter), as well as high food costs. In the upcoming year, the company's CFO, Mark Hood, said, "consumer confidence continues to be adversely impacted by ongoing macroeconomic headwinds, including health care costs and unemployment which disproportionately affects lower- and middle- income consumers."
Also on Tuesday afternoon, Container Store CEO Kip Tindell said in the company's earnings release that, "Consistent with so many of our fellow retailers, we are experiencing a retail 'funk.'"
Wednesday evening, Lumber Liquidators, a specialty hardwood flooring retailer, said that the consumer demand it experienced following the tough winter didn't carry into May and June. CEO Robert Lynch said, "The improvement in customer demand we experienced beginning in mid-March did not carry into May, and June weakened further. Our reduced customer traffic has coincided with certain weak macroeconomic trends related to residential remodeling, including existing home sales, which have generally been lower in 2014 than the corresponding periods in 2013."
Thursday morning saw more downbeat commentary from a retailer, this time Family Dollar. Following the company's report, which saw that same store sales fell 1.8% during the quarter, CEO Howard Levine said, "Our results continue to reflect the economic challenges facing our core customer and an intense competitive environment."
And then yesterday afternoon, Gap topped off the week of discouraging retail commentary by reporting June same-store sales that fell 2% year-over-year. According to data from Bloomberg, sales were expected increase 0.8%. Gap's management, however, was light on additional color.
This rash of discouraging retail data, however, makes the broader U.S. economic picture seem murky.
Last week, the nonfarm payrolls report for June showed employers added 288,000 jobs as the unemployment rate fell to 6.1%. The report also showed that the number of involuntary part-time workers rose 275,000 to 7.5 million.
And these workers, which the BLS calls "persons employed part-time for economic reasons," could be part of the "lower- and middle-income consumer" that Bob Evans discussed in its quarterly report.
Earlier this week, however, the Job Openings and Labor Turnover Survey, or JOLTS report, showed that job openings surged to 4.635 million in May, exceeding expectations for 4.35 million.
Economists were encouraged by the report, with Peter Tchir at Brean Capital saying that, "You have to go back to June 2007 to get a better number."
Most Americans can't afford to buy things.
It's a miracle the economy is doing as well as it is.