A Picture is Worth a Thousand Words – What Does That Mean for Your Remodeling Company?
June 5, 2019Instagram, Pinterest, Facebook and Houzz for Your Remodeling Business
August 27, 2019Growth Slowed in Q2 and Q3 Looks Slower as Well…
There certainly has been quite a bit of economic turbulence since our last update in the spring. After strong first quarter GDP growth of 3.1% growth slowed in the second quarter to 2.1%, based on the first estimate from the Bureau of Economic Analysis. The GDPNow estimate for third quarter growth from the Federal Reserve is 2.2%. Economists’ estimates for Q3 growth range from 1.6% to 2.4%.
Slowing Global Growth Leading to Lower Interest Rates…
With growth slowing in the US combined with impact from the trade tariff fight with China, global economic growth is slowing, based on data from Europe and China. This has led to lower interest rates around the world as governments and investors react to the slowing growth.
Leading the Fed to Cuts Rates…
On July 31st the Fed cut interest rates in the United States by 0.25%, the first reduction since 2008 as a result of the global slowdown and the trade tensions with China. The recent “flattening” of the US Treasury yield curve, a precursor to past recessions in the United States, is spooking some to believe that the global slowdown may portend worse things to come for the US economy.
However, Retail Sales are Strong and Unemployment Remains Historically Low, for Now…
If there is one beacon of apparent strength in the economy, it is the US consumer. This may help insulate the home improvement market to some extent as other sectors of the economy slow. Based on data from the Commerce Department retail sales rose 0.7% in July, up from a 0.3% gain in June, as consumers spent more at online retailers, grocery stores, clothing retailers and electronics/appliance stores.
Continued growth in the job market remains a catalyst for the strength in retail sales. In July the economy added 164,000 jobs compared to 193,000 in June and 62,000 in May. Wages continued to increase as well, up 3.2% compared to July 2018. The unemployment rate in July was 3.7% which is hovering near a 50-year low.