High consumer confidence levels spur purchasing activity according to Epperson, as does the increase in consumer wealth, which has grown since the recession from $54 trillion to a record $96 trillion. He attributes this gain to home prices, the stock market and less personal debt. His bullish outlook is bolstered by the fact that corporate America is experiencing its best decade since the peak in the 90’s, investing in equipment, technology, and facilities, with over $2 trillion in cash accumulated. “Banks are healthy and lending, plus we have new consumer credit sources, often funded by private equity, giving retailers more ways to finance our customers,” he said.
Epperson’s most compelling reason for being upbeat about 2019 and beyond is the irrefutable shift in US demographics. 83 million Millennials (now 19-37 years old) are buying and will continue to purchase furniture and mattresses, with their potential for spending in this category increasing annually until 2034. Their proportion of spending changes with their age and income. When today’s 25-34-year-old households move into the 35-44 age group, their share of all pretax income will grow from 15.7% to 21.0% and their share of furniture spending will grow from 17.9% to 21.5%. It will also increase when they move into the 45-54 age sector.