Brace for Impact. Looming Port Strike Threatens Furniture Supply Chains and More

Originally published September 30, 2024. This version was rebuilt from the ILA's September 30 update, BEA's personal income and outlays report and the Census Bureau's new home sales report for the FIN archive, and the facts are as of that date.

On the last day of September 2024, East and Gulf Coast ports were hours from shutting down. Spending and housing data showed a consumer still buying, slowly.

The short version

• The ILA said USMX seems intent on causing a strike at all ports from Maine to Texas.
• BEA said personal consumption expenditures increased 0.2% in August.
• Census said new home sales were 716,000 in August, 9.8% above a year earlier.

Labor negotiations and supply chain disruptions

On the morning of September 30 the ILA said USMX continued to refuse its demands and seems intent on causing a strike at all ports from Maine to Texas beginning in almost 12 hours.

The union had warned for weeks that a walkout would start at 12:01 am on October 1st without a new Master Contract.

Update. The strike began October 1 and ended on October 3 when the two sides reached a tentative agreement on wages and extended the contract to January 15, 2025.

Consumers keep spending slowly

BEA said personal consumption expenditures increased $47.2 billion, or 0.2%, in August. After adjusting for prices, real goods spending rose less than 0.1% while services rose 0.2%.

The PCE price index rose 0.1%, another sign inflation was cooling. Spending on goods, where furniture sits, was nearly flat.

Housing

Sales of new single-family homes ran at an annual rate of 716,000 in August, 4.7% below July but 9.8% above August 2023.

New home buyers tend to furnish quickly, so steady new home sales supported furniture demand even as resales stayed weak.

Closing thoughts

The port strike was the immediate threat, while slow spending growth and steady new home sales described the backdrop. Furniture companies ended the quarter watching the docks.

Related on FIN

• The Freight Mafia's New Playbook
• Move-In Furniture Tickets Are Drying Up

Sources

• International Longshoremen's Association, ILA update (Sept. 30, 2024)
• International Longshoremen's Association, Rank and file ready to strike on October 1 (Sept. 17, 2024)
• International Longshoremen's Association, Joint statement regarding Master Contract (Oct. 3, 2024)
• U.S. Bureau of Economic Analysis, Personal income and outlays, August 2024
• U.S. Census Bureau and HUD, New residential sales, August 2024