Retailers, consumers and prices
Memo to Obama: Help Housing
Home Depot is hoping that U.S. President-Elect Barack Obama will take actions that will help bring the housing market out of its years-long slump.
As recent as early September, the retailer’s top executive said the housing market may be nearing the bottom of its decline. But that was before the financial crisis and rising unemployment took a toll on consumer confidence.
Now, the world’s largest home improvement chain says it is not seeing the better trends it had expected and noted that some housing markets, such as the U.S. Northwest, have worsened compared with a year ago.
“We think it’s prudent to be cautious,” Chief Financial Officer Carol Tome said in an interview this week after Home Depot posted better-than-expected third quarter results.
Though she didn’t give specifics on what the incoming U.S. president could do to aid the housing market, she expressed hope that Obama would do something.
“Anything the Obama administration can do for housing is certainly something we’d support,” Tome added.
She said rising unemployment now poses a major threat to consumers, who are cutting back their use of credit and paying more with cash.
Tome noted that during previous U.S. recessions, it was ultimately the strength of consumers that helped lead the economy out of a slump. But this time, they are the ones hurting the most.
“If they’re losing their jobs, it’s hard to see how they’ll take us out (of recession),” she said.