Consumer Products Rental NAICS 5322

May 30, 2025 - Retail Sales Soften

• US retail sales, a proxy indicator for consumer products rental demand, increased 0.1% on an adjusted basis in April 2025 compared to March. The month-over-month gain in April was smaller than that seen in March, as consumers front-loaded spending on some types of goods, specifically automobiles, ahead of tariffs, according to Reuters. Retail sales for furniture and home furnishing stores rose 0.3% in April over March, and electronics and appliance store sales also increased 0.3%.
• The Conference Board’s Consumer Confidence Index increased 12.3 points to 98.0 (1985=100) in May from April. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions— rose 4.8 points to 135.9. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions— increased 17.4 points to 72.8. Expectations Index readings below 80 can signal a coming recession. Stephanie Guichard, Conference Board Senior Economist of Global Indicators, said, “Consumer confidence improved in May after five consecutive months of decline. The rebound was already visible before the May 12 US-China trade deal but gained momentum afterwards. The monthly improvement was largely driven by consumer expectations as all three components of the Expectations Index—business conditions, employment prospects, and future income—rose from their April lows.”

• The tariff-based trade policies of the Trump administration have the potential to increase the prices of several consumer product rental categories, including appliances, electronics, cell phones, and computers. On April 9, the Trump administration paused its reciprocal tariff agenda for 90 days for most countries but left in place a baseline 10% import duty on all countries except China, which faced total tariffs of 145%. Canada and Mexico are not subject to the 10% baseline tariffs, and goods trading under the US-Mexico-Canada Agreement (USMCA) will remain duty-free. On May 12, 2025, the US and China declared a 90-day reduction in the tariffs each country imposes on the other amid further negotiations. The US tariff on imports from China was reduced from 145% to 30%, while China dropped its duty on US imports from 125% to 10%. On May 29, the US Court of International Trade (CIT) ruled that the Trump Administration overstepped its authority in levying widespread tariffs and voided most of them, according to the Wall Street Journal. The following day, the US Court of Appeals for the Federal Circuit paused the CIT ruling pending further arguments. In 2024, Mexico accounted for 32% of US imports of computer equipment, 10% of communications equipment (including cell phones), 34% of audio and video equipment, and 24% of appliances. Over the same period, China accounted for 28% of US imports of computer equipment, 43% of communications equipment, 25% of audio and video equipment, and 43% of appliances.
• Spending patterns at dollar stores suggest that low-income consumers are tightening their belts, according to The Wall Street Journal. While inflation has slowed and wages have risen for many, some of the country’s lowest wage earners are feeling pinched. Many low-income families were able to build their savings in the years immediately following the pandemic amid stimulus checks, higher demand for blue-collar jobs, and pandemic-era food assistance and child tax credit benefits. However, many low-income workers have spent down their savings. Some dollar stores report that their customers are waiting until the last minute to make event-based purchases, such as holidays, and spending at the end of the month – when lower-income families’ budgets are depleted – has fallen.