Hardwood Floors August/September 2025

Market Matters (Continued)

This is a summary of the June 2025 Quarterly Market Monitor Report published by Market Insights LLC. NWFA members have exclusive access to the full report, which provides forecasts and analysis of economic, market, and industry conditions and trends affecting the North American flooring market. The report includes a historical and forecasted volume of dollar sales of total wood flooring (at mill sell price) per metro area and state. Separate reports are available for the United States and for Canada. The availability of the reports on a quarterly basis will provide NWFA members with current data that can help them develop business plans, prioritize inventory, and react to market conditions in a timely manner. NWFA members may download the full report by visiting nwfa.org.

EMPLOYMENT GROWTH AND UNEMPLOYMENT RATE

Unemployment Rate

Employment Change

Significant downside risks related to this forecast include: • Tariffs on U.S. imports could raise prices and inflation beyond forecasted levels, slowing consumer spending. The tariffs also could disrupt trade relationships and create logistical interruptions. • Deficit spending, if continuing, will weaken the U.S. dollar. Continued deficits also could accelerate inflation and interest rates severely threatening U.S. economic growth. • The U.S. stock market is expected to remain relatively positive. Should a major market correction occur, it would jeopardize the economy, especially firms and individuals with retirement savings, endowments, pensions, etc. A risk to this analysis is that a major downturn in the market could trigger a major decline in the U.S. economy and national wealth. Near-term employment growth will slow as firms, faced with economic uncertainty, hold back on new hires until the situation clarifies itself (chart above). Given the shift of the U.S. economy to more technical occupations and more small businesses, personal income continues to rise supporting consumer spending. U.S. productivity has been exhibiting gains which offset the continuing annual U.S. budget deficits. With the current budget deficit averaging $1.75 trillion and the total gross federal debt currently outstanding in 2025 at $37.3 trillion, continued productivity gains from automation, artificial

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intelligence, and general productivity enhancements will be required to keep the growing federal debt manageable. A major obstacle to U.S. economic growth is the current high bank prime interest rate. High interest rates are a function of a fear of anticipated return of higher inflation and the large annual federal budget deficit. As inflation cools, the prime rate will fall. Lastly, Iran’s potential responses to attacks on its nuclear bomb making centers are very uncertain. It is assumed that any responses by Iran will not markedly affect the U.S. economy. Santo Torcivia is president of Market Insights LLC in Reading, Pennsylvania. He can be reached at 610.927.2299 or storcivia@marketinsightsllc.com.

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