Today, we learned that retail sales fell for the first time since June 2010. But one retail sector is quite used to seeing sales decline, even as they have begun to grow in other industries. Furniture and home furnishing sales fell much farther than broader retail sales and have yet to meaningfully recover. Their path has been a brutal one.
Here's a chart showing furniture and home furnishing sales (red line) versus total retail and food services sales (green line):
Furniture and home furnishing sales peaked in January 2007 at $9.6 billion, right around the time the housing bubble began to deflate. Over the next two years, they would fall by more than 25% to $7.1 billion in October 2009. Since then, they've improved a little, but not much. In May, they were $7.4 billion, up 4% -- over 20 months.
As you can see, furniture fared far worse than broader retail sales. In January 2007 their trajectories began to diverge. Furniture sales sunk farther and never really recovered. Meanwhile, broader retail sales rose to new highs this year. Since they hit their recessionary lows, retail sales have gained more than 16% -- compared to the mere 4% recovery for furniture and home furnishings. And remember, broader retail sales did not fall nearly as far.
There's a pretty significant connection between home sales and furniture sales. That begins to explain the divergence of furniture sales compared to those of other goods and services. Of course, home sales have also failed to meaningfully rebound to their pre-bubble levels. Since they aren't expected to rise again anytime soon, we shouldn't expect much sunnier days for furniture sales in the near- to medium-term either.