The number of Americans applying for unemployment benefits plunged in December to the lowest level in 52 years, more evidence that the US job market is recovering from last year’s coronavirus recession. This is good news for companies wanting to liquidate inventory or sell dead stock.
Consumer spending is rising and retail sales continue to improve for both regular inline goods and closeouts. Unemployment claims dropped by 43,000 to 184,000 last week, the lowest since September 1969, the labor department said Thursday. The four-week moving average, which smooths out week-to-week ups and downs, fell below 219,000, the lowest since the pandemic hit the United States hard in March 2020. At the beginning of the crisis businesses were forced to liquidate inventory, and were shutting down warehouses and closing businesses at an alarming rate; but now construction for residential and commercial property is booming. Closeout liquidators and companies selling liquidation inventory will benefit from this.
Seasonal volatility probably contributed to last week’s drop as the labor department adjusted the numbers to reflect job market fluctuations around the holidays. Before seasonal adjustments, claims actually rose by nearly 64,000 to almost 281,000. Low jobless claims means most people are working and earning a paycheck, which allows them to spend and continue to grow the economy. Discounters selling closeouts are doing exceptionally well as leading retailers like Walmart, Costco and Dollar Tree are experiencing strong sales. Rather than shutting down warehouses, many businesses are building brand new warehouses allowing them to store record amounts of imports for future sales. Of course, these huge warehouses will still accumulate overstock merchandise and at times they will have to liquidate inventory and sell dead stock. Closeout liquidators can be helpful in these situations.
Even with record numbers of people employed, businesses are going to generate closeouts due to unexpected slow sales, overproduction or canceled orders. Large warehouses are great when all the inventory is moving all the time, but when old merchandise sits idle in the warehouse, it’s time to reach out to liquidation buyers who can help
A strong economic recovery and persistent labor shortage pushed jobless claims to their lowest level in more than half a century, just 18 months after the pandemic prompted six million workers to file for unemployment in one week. Businesses were force to shut down warehouses so quickly it was a flood of panic and uncertainty as we headed into lockdowns and unemployment. But in a relatively short time the picture has changed dramatically and today we are experiencing huge consumer demand, low unemployment and return to solid growth. Instead of shutting down a warehouse, many ecommerce businesses are growing and opening new warehouses. When moving locations, it is important to sell dead stock rather than move it from the old warehouse to the new one.
If your business is moving, product liquidation companies that specialize in closeouts can make your transition much easier. If you have been in one location for many years, you will likely have old merchandise that you even forgot about. It has been taking up valuable warehouse space all this time and should have been disposed of a long time ago. It is important to liquidate inventory now rather than move it to a new location.
We are at an interesting cross section in time as businesses push up prices because demand is growing faster than supply. In the short term, this higher growth may lead to lower unemployment as firms take on more workers. But a sharp increase in interest rates can cause economic growth to fall, leading to recession and unemployment. In a recession we trend back to an economic more aligned with our experience in March 2020 where companies again shut down warehouses, liquidate inventory and experience slowing sales.
A recession is a macroeconomic term that refers to a significant decline in general economic activity in a designated region. It had been typically recognized as two consecutive quarters of economic decline, as reflected by GDP in conjunction with monthly indicators such as a rise in unemployment. During these times businesses can struggle with slow sales, and the rate of selling closeouts may be higher in an effort to generate cash. Liquidating overstock inventory is always important, however it is even more important during economic crisis. Surplus wholesale suppliers tend to be busy during economic downturns. The National Bureau of Economic Research (NBER), which officially declares recessions, says the two consecutive quarters of decline in real GDP are not how it is defined anymore. The NBER defines a recession as a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. Overstock inventory buyers are busy in all economic cycles, but during a recession we find liquidation buyers and closeout wholesalers do not suffer as much.
Merchandise USA liquidates excess inventory and overstock merchandise. We have been in business more than 37 years and our customers include closeout websites, closeout brokers and excess inventory buyers. If you are going out of business, shutting down a 3PL warehouse or closing your Amazon FBA account we can help you liquidate.