Retail Observer

RETAILOBSERVER.COM SEPTEMBER 2017 32 W e are rapidly approaching the ninth anniversary of the 2008 Great Recession, which undoubtedly will not be remembered fondly by Americans. When President Bush addressed the Nation on September 24 of that year, he warned us of the coming crisis and the depravation that was going to occur. You may remember that thousands of companies declared bankruptcy in '08 and '09, many in the appliance and furniture industry. Global giants also struggled, we lost Lehmann Brothers, Bear Stearns, and Merrill Lynch. The loss of these iconic corporations signaled that all was not well in our little universe. As we approach the end of the first decade after this great calamity, I think it is important to reflect on the fact that appliance and furniture businesses are still here and represent a major factor in their respective industries. We have independent dealers operating successful retail locations throughout America, serving customers, competing with Big Box stores, and turning a profit. We are witnessing another evolution in the retail business as Amazon is reaching critical mass and driving independent businesses into bankruptcy. Fortunately, the impact of online sales are being felt more in the fashion industry than in the furniture and appliance business. The possible demise of Sears and the exit of hhgregg are opportunities to capture market share and grow revenue in ways not seen over the past ten years. After eight years of expansion, we are now beginning to hear the echoes of pundits who are predicting the next recession. These naysayers are apparently not looking at the numbers; as of June the U.S. had a nine-year high in consumer confidence, our unemployment rate is the lowest it has been since 2007, consumer spending has improved and while Q1 GDP was a weak 1.4% we are optimistic the second half will come in with growth around 2.3%. One indicator of recession is the global economy, while I can't say it is moving into high gear, we have seen economic growth this year in France, Germany, and Britain. China, while their growth rate has fallen from 14% eight years ago to around 7% today, they have stabilized and appear to be poised for an increase. South America is imploding and there is little hope of a rebound in Brazil or Venezuela, but Europe and Asia are turning an economic corner, which is good news. The American economy is healthy, and the Fed confirmed that by raising interest rates in March. Janet Yellow commented recently that, "the economy appeared to be in a virtuous loop of hiring, spending and investment," and this is a strong indication that growth will continue into 2018. The economy added 220,000 jobs in June, which beat economist's expectations and the unemployment rate ticked up to 4.4% as more people came back into the workforce to take available jobs. Over the last quarter job creation has averaged 194,000 jobs per month. Car sales improved markedly in June and are now annualized at around 17.1 million new vehicles. U.S. factory activity spiked in June to the highest level in three years giving the Fed some more ammunition to raise interest rates again in the fourth quarter. The only downside is that only 1,000 factory jobs were created in June, continuing a growing trend for corporations to use robotics in manufacturing and thus fewer jobs for people. The bottom line is this: everything you have to look forward to in the next decade is significantly better than what you have lived through in the past nine years. America has been through a lot of change since 2008 but our economy is moving in the right direction. The second half of 2017 should continue the slow but steady expansion of this business cycle without the cloud of recession. THE FEDERAL RESERVE RAISES INTEREST RATES Signals a stronger second half Joe Higgins Economic Viewpoint Joe Higgins began his career with General Electric with a degree in economics. Joe left GE and joined Whirlpool as National Director of Sales. Joe retired from Whirlpool in 2012 in a career that spanned two companies and 43 years in the appliance industry. For the past two years, Joe has been speaking at conventions, seminars and sales meetings across America. His work includes presentations on the United States economy, leadership, creating a high perform-ance culture, healthy teams, and customer service. Visit www.q4qwithjoe.com. RO

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