Why is this important? Based solely on my gut (which processes data differently than my brain but is often a reliable source of insight 🙂 I read this as a bad economic indicator for Massachusetts.
Sales of luxury items like home stereo, surround sound, and high-end video systems will fade in hard economic times faster than just about any other luxury (optional) products including computers, cars, home remodeling, or pools.
My hypothesis, People are thinking hard about how to use their spare $2,000 to $5,000 (if they have it) and great looking or sounding home movies are taking a back seat to critical expenditures.
Other markets to watch: Woodworking for hobbyists’ and the vacation industry. Think of these industries as Canaries in coal mines.
Tagged: Massachusetts, economic slowdown, Tweeter Etc., indicator
However, I would qualify my vote with a couple of points.
Only one retailer is being reported on here; is Tweeter’s slow growth particular to them, or is it industry-wide?
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p>Could it be possible that consumers are just choosing to purchase their electronics elsewhere, at a discount retailer (Wal-Mart, Target) or at a big-box store (like Best Buy, or Circuit City). If consumers are buying lower-priced electronics at discount stores, then that itself would indicate some consumer caution, just as much as if consumers weren’t buying any electronics. However, if Tweeter’s customers are instead shopping at a different higher-end retailer, then Tweeter has deeper problems with consumer loyalty rather than the economy.
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p>Overall, though, I’d agree with the “Canary in a Coalmine” analogy.
But you do raise an important point. The WSJ reported today that the retailers were reporting a mixed bag of results. My interpretation is that our recent boomlet has peaked, and some retailers are the canaries you seek and some aren’t (yet).
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The consensus economic forecast is that growth in the US economy will be about half the rate in the second half (~3%) that it was in the first (~6%). This is still a far cry from a recession, though there are some who worry that that is a possibility.
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<IMG src="http://online.wsj.com/img/hp_whats_news_stars.gif" width=30 border=0
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• Mixed retail-sales results clouded economists’ forecasts for the second half of the year. Wal-Mart and Gap posted weak results. Others, such as Target and J.C. Penney, continued reporting stronger gains. 4:06 p.m.
• Charting Sales: Ann Taylor vs. Nordstrom, more
• Washington Wire: Wal-Mart Warms to Al Gore