The Big Story

Holiday Cheer – Lots of It, Unless…

Maeghan Thompson

We are now fifty-eight days from Christmas.  In just eleven days, Halloween will be over, leftover candy will disappear from retail shelves and retail windows will be prepped for the Holiday season.

Will Holiday retail sales be Scrooge-like or jolly?  The prognosticators believe there will be an abundance of good cheer, but that the Grinch can’t be ignored.

To provide context, overall Holiday sales represent approximately 20% of total annual sales.  Importantly, Holiday sales can be more profitable because incremental volume comes without a proportional increase in costs and expenses.

Over the last ten years, Holiday sales have grown at annual average rate of 3.4%.  Last year, the patriarch of Holiday forecasting, the National Retail Federation (the “NRF”), predicted a rosy increase of 4.3% to 4.8% over the prior year.  Most forecasters had similar bullish predictions.  However, the actual increase came in significantly lower at only 2.1% – the lowest gain since the U.S. economy came out of the Great Recession in 2009.  Why such a miss?  There were two major unexpected factors:  the year-end shut down of the federal government and the steep drop in the stock market.  This year forecasters have even a longer Holiday wish list of factors they hope to NOT find under the tree.

The NRF merrily predicts that sales during this Holiday season, including Thanksgiving, Black Friday, Small Business Saturday, Cyber Monday, Super Saturday and Christmas (marketers have done a noteworthy job of creating multiple shopping occasions) will grow between 3.8% and 4.2% and total approximately $770 billion.  The NRF stated, “Current economic data and the recent momentum of the economy show that we can expect a much stronger Holiday season than last year.  Job growth and higher wages mean that there’s more money in families’ pockets so we see both the willingness and ability to spend.”  However, the NRF also cautioned, “There are probably very few precedents for this uncertain macroeconomic environment.  There’s clearly been a slow down brought on by considerable uncertainty around issues including trade/tariffs, interest rates, global risk factors and political rhetoric.”

Other forecasters are even more optimistic, but also have a list of caveats.  AlixPartners predicts that Holiday sales will increase 4.4% to 5.3%.  The consulting firm expressed, “While our forecast is bullish, these are unchartered waters.  From on-again, off-again tariffs, to a growing chorus concerned about a recession, a looming election and geopolitical uncertainty, this season is unlike any other in recent memory.”  The advisory firm Deloitte is calling for a 4.5% to 5.0% increase in Holiday sales as the firm points to elevated consumer confidence, improved customer experiences at the retail level and a relatively low basis of comparison given 2018’s performance.  However, among other factors, the firm noted that rising oil prices and the trade tariffs pose headwinds.

Other factors that play against these upbeat forecasts are dates and weather.  Last year, Thanksgiving day was early, while it’s late this year.  Thus, there are six fewer shopping days between Thanksgiving and Christmas (procrastinators beware).  Regarding the weather, last year generally saw unseasonably cold temperatures in November, but warm temperatures in December.  The opposite is expected this year according to IBM (yes, IBM, who has a Consumer Weather and Climate Strategy division).  Shoppers get in the Holiday mood when the weather turns cold, which means that sales may come later in the season this year.

When segmenting forecasts for e-commerce Holiday sales, the prognosticators are not in the same sled.  According to the NRF, e-commerce sales grew 11.5% in 2018, and they forecast that such sales will grow between 11.0% and 14.0% this year.  Deloitte is more bullish as the firm projects that online sales will grow between 14.0% and 18.0% and represent approximately 13.0% of all Holiday sales (versus 11.6% last year).  However, the consulting firm NetElixir predicts that e-commerce sales will grow only 9.0% this year, and they point to lagging Back-to-School e-commerce sales as an indicator.

Well, we’ll know soon enough who was more right and what factors did and didn’t appear, but in the meantime, fifty-eight days will pass quickly.  Get shopping.




Headlines of the Week

Barneys could launch more stores inside Saks in Authentic Brands deal

If the company trying to buy Barneys New York gets its way, there could be many more Barneys popping up inside Saks stores in the near future. Authentic Brands Group, the licensing company that owns brands like Aeropostale and Juicy Couture, has put in a $271 million bid with B. Riley Financial to buy Barneys out of bankruptcy, according to a court filing. The bid serves as a so-called stalking horse offer guaranteeing it will buy the retailer — unless another bidder offers more. Others, including a group of retail executives, are said to be vying for the company, people familiar with the talks told CNBC. If more bids are lodged, Barneys will hold an auction on Oct. 24. As part of the Authentic Brands deal, it would put Barneys stores inside Saks, the luxury store owned by Hudson’s Bay Company, a person familar with its plans said. Saks has 39 stores across 22 states.


How Kohl’s is trying to keep its stores fresh ahead of the holidays

Kohl’s stores are getting a bit of a refresh and are being infused with new brands ahead of this holiday season. At a Kohl’s store here, the retailer has rolled out a space called “Curated by Kohl’s,” to be heading to 50 of Kohl’s roughly 1,100 locations nationwide. It features six brands, including lingerie maker Adore Me and card marker Lovepop. And in these spaces, Kohl’s is working with Facebook — and its massive database of brands that advertise on the social media platform and Instagram — to help market the brands and choose what might rotate in next.



Apparel & Footwear

Asos Profits Tumbled 68% In A ‘Disappointing’ Year. What Happened?

“Digital is highly complex. Few have cracked it. Fewer have even made a profit,” were the words of Asos founder Nick Robertson in October 2013. Six years later, Asos latest earnings show the online retailer is still trying to crack the code. The firm, once a market leader among digital-first fashion companies, has seen its profits tumble and revenue growth slow down as it emerges from a “difficult year” of operational challenges and attempts to expand in the U.S. and EU, simultaneously. When Robertson, along with co-founder Quentin Griffiths founded the fashion giant as As Seen On Screen in 2000, they envisioned a world where their customers could access a mass of their favourite brands on one slick platform. But with that ambition, and recent plans to scale it internationally, came problems that resulted in profits slumping 68% to $42 million (£33.1 million) in the year to August 31, from $130 million (£102 million) in 2018.


Gap Inc. opens first retail location of its Hill City menswear brand

Hill City has popped up in its parents’ hometown and is also expanding in other ways as it looks to start ramping up its growth. The direct-to-consumer premium men’s activewear brand, which Gap Inc. launched a year ago, has opened a store in San Francisco’s Hayes Valley neighborhood. The 12-month pop-up, located at 522 Octavia Street, features a curated assortment of best sellers. It is designed to test the operations of a physical space and engage with the community with local events. Hill City is also trying something new for a Gap Inc. brand: entering into wholesale partnerships. Select items will be available at, Need Supply, Neighborhood Goods, A Runner’s Mind and Ships (in Toyko). Gap’s Athleta brand will feature a capsule Hill City collection in seven locations.

Indochino in store milestone

Digitally native Indochino just opened its 50th store — with more to come by yearend. The made-to-measure menswear retailer has opened its 50th location, a 2,700-sq.-ft. space in the Georgetown section of Washington, D.C. So far this year, Indochino has opened 13 locations. “Opening our 50th showroom is an exciting moment for everyone at Indochino, and to be reaching this milestone in the US capital makes it all the more incredible,” said Drew Green, president and CEO. “As we continue to welcome new customers from across North America, we’re finding that offering an in-person experience plays an integral role in growing a legion of loyal fans.” Indochino’s expansion is not limited to showrooms. In 2019, the company expanded product offerings to include customizable long and short-sleeve casual shirts. And it recently launched new outerwear with custom macs, trench coats, and overcoats.

Store concept b8ta expands into fashion, lifestyle

B8ta, which calls itself a “retail as a service” platform, on Wednesday announced a new concept called “Forum” that pushes its focus beyond electronics and devices into fashion and lifestyle. Its first Forum location, which includes tech-enabled dressing rooms, opens Nov. 15 on Melrose Avenue in Los Angeles, in the West Hollywood shopping district, according to a company press release. Each brand partner is designing its own space and curating its brand experience, including product launches, community, influencer and VIP events, b8ta said. Its first anchor partner is women’s athleisure brand ALALA, and the store will otherwise feature a rotating selection of products from more than 25 brands. There are various retail concepts being tried these days to figure out how to best leverage physical locations, as it dawns on retailers that stores can continue to provide an advantage as long as they entice customers. B8ta leverages good store design and data to showcase goods, many from little-known makers, in its own stores and in other retailers’ shop-in-shop spaces, notably at Macy’s, which invested in the company last year.



Athletic & Sporting Goods

Major League Fishing acquires Fishing League Worldwide

Tulsa-based Major League Fishing announced that it has reached an agreement to acquire Fishing League Worldwide, said to be the world’s largest tournament-fishing organization with a huge grassroots reach across the country and overseas. From a startup with a single made-for-TV and internet viewing tournament in late 2011, Tulsa-based Major League Fishing in 2020 will grow to include 225 tournaments, from high school to the top professional league.


Nike acquires Russell Wilson’s TraceMe startup

US sportswear giant Nike has confirmed the acquisition of the TraceMe startup venture, originally founded by Russell Wilson, and its fan engagement platform Tally.  The National Football League (NFL) star was formerly the executive chairman of TraceMe, helping the company earn US$9 million in funding from the likes of Seattle-based Madrona Venture Group; Jeff Bezos’ fund, Bezos Expeditions; and YouTube co-founder Chad Hurley, among others.  Founded in 2017, TraceMe’s original platform was designed to connect celebrities with ‘superfans’ via behind-the-scenes content and community features before the company pivoted, shedding staff to launch Tally in November 2018. Nike, not a company known to make acquisitions, confirmed the deal to Tech Crunch in a short statement: ‘Nike, Inc. has acquired TraceMe to supplement the company’s content strategy on Nike-owned platforms.’


Adidas and Nike supply tactics are an abuse of market dominance, British retail giant says

The sales and supply strategies of big sports brands such as Adidas and Nike should face government investigations, U.K. retail giant Sports Direct claimed.  In a statement, the British firm accused global sports apparel brands of abusing their dominance in the market by constantly chopping and changing the availability of their products to retailers.  “These ‘must have’ brands hold an extremely strong bargaining position vis-a-vis the retailers within their supply networks and use their market power to implement market wide practices aimed at controlling the supply and, ultimately, the pricing of their products,” the company claimed.


Cosmetics & Pharmacy

Is Beauty Hitting Pause On $1 Billion Deals?

If Drunk Elephant isn’t selling for $1 billion, is anybody? Probably not anytime soon. Beauty industry sources have indicated that $1 billion deals — especially for indie brands — are going to be few and far between for the next few years. The current crop of indies lack scale, meaning that even if strategic buyers were interested, they wouldn’t be paying high dollar amounts to take over those brands. There are exceptions and some of the legacy assets in the market could fetch $1 billion plus, sources said, including Revlon Inc., possible divestitures from Coty Inc., and Charlotte Tilbury, which industry sources said is exploring a sale process with billion-dollar expectations. There are also a handful of private equity-backed brands said to have landed billion-dollar plus valuations from private equity investors, including Morphe, Pat McGrath, Huda Beauty and Anastasia Beverly Hills, though none of those are said to be actively exploring a sale. But for now, the high-dollar part of the indie beauty M&A market is mostly behind us, industry sources agree.

Diplomat sells certain assets of Envoy Health Management to Diligent Health Solutions

Diplomat, the nation’s largest independent provider of specialty pharmacy services has sold certain assets to Diligent Health Solutions. Financial details and additional terms of the transaction were not disclosed. The contracts administered at the Chantilly, Va. location as well as associated Envoy Health Management employees have been transferred to Diligent Health Solutions. Diplomat is retaining a portion of the Envoy Health Management operations, specifically the portion operated out of the Flint, Mich. location, which will continue to specialize in digital therapeutics and pharmaceutical services.


Discounters & Department Stores

Macy’s revamps menswear department at Herald Square

Macy’s is making an effort to improve its men’s section at its iconic Herald Square store. The department store joins several other retailers in amplifying men’s fashion. Last year, Nordstrom opened a men’s-only store in New York to great fanfare, well before the opening of its New York flagship next week. Saks Fifth Avenue left open its men’s store in Manhattan’s financial district last year, as it closed its women’s store there, and this year opened a luxe men’s footwear space at its own newly renovated flagship. J. Crew-owned Madewell, in its race to grow ahead of its proposed initial public offering, recently released its first-ever men’s fall collection.

Walmart Can Maintain Its New Price War With Amazon If…

The world’s biggest brick-and-mortar retailer just escalated its price war with the world’s biggest e-commerce retailer. That is, Walmart is subsidizing price cuts it requested of some third-party sellers offering their goods at The move, according to Bloomberg, appears to be a response to a similar price-lowering strategy put in place in August. It’s clearly good news for shoppers, and it’s not bad news for the merchants utilizing Walmart’s e-commerce venue. It may even be good news for those vendors, as lower prices for consumers may improve their total sales volume. The losers in this paradigm are investors, who are supplying the subsidies in the form of thinner profit margins. Even so, if Walmart handles the new strategy effectively, it might be well worth the added cost of doing business.



Emerging Consumer Companies

Ledbury, men’s apparel brand, raises $4.5 million

Ledbury, the Richmond-based men’s apparel brand, has raised $4.5 million. The company expects to open a retail store in New York in November. It will be the company’s third store, and will mark the beginning of a larger retail expansion plan to major U.S. cities throughout 2020.

Milk Bar raises Series B, plans to open flagship and expand into grocery

Milk Bar has completed a Series B capital raise, and intends to use the funds to grow online sales and to expand its physical presence. It currently has sixteen locations and plans to open a 4,000 square-foot flagship in Manhattan by the end of the year. The company also plans to launch wholesale, and to sell its products in retail outlets like grocery stores.

ZitSticka raises $5 million Series A

Zitsticka, a new skincare brand gaining traction with its new approach to combatting acne, announced a $5 million Series A investment led by BFG Partners, with participation from Interplay Ventures, Silas Ventures, and Propeller Industries. The company launched its flagship product, a penetrative patch to fight upcoming pimples, in February, 2019. The brand launched online and has since expanded to luxury retailers such as Net-a-Porter and Barney’s.



Grocery & Restaurants

Cracker Barrel buys Maple Street for $36M

Cracker Barrel Old Country Store Inc. has acquired emerging fast-casual brand Maple Street Biscuit Company in an all-cash deal valued at $36 million, the Lebanon, Tenn.-based casual dining chain announced Friday. The purchase of the 33-unit Florida-based breakfast and brunch chain comes a few months after Cracker Barrel took a non-controlling position in Denver-based Punch Bowl Social. Cracker Barrel CEO Sandra B. Cochran said the company plans to convert its Holler & Dash Biscuit House units into Maple Street locations in the coming months.

VMG Partners acquires popchips to anchor new branded snacking platform

Private equity firm VMG Partners is betting big on the snacks category with the formation of a new division – Velocity Snacks Brands (VSB) – set up to buy, incubate and grow snack brands, beginning with the acquisition of the popchips brand from majority investor Verlinvest for an undisclosed sum.

Kind Healthy Snacks gets Creative with first acquisition

Kind Healthy Snacks has acquired Creative Snacks Co., High Point, N.C., a manufacturer of cluster-style snacks and trail mixes. Terms of the acquisition were not announced. The acquisition is Kind Healthy Snack’s first. It signals that the snack maker is poised to expand its share of the healthy snacking market through a broadened portfolio, according to the company.

Home & Road

Interior decorating company Havenly raises $32M

Home interior decorating and e-commerce company, Havenly, has closed a Series C round of financing totaling $32 million, bringing its total funding to date to $57.8 million. The round was contributed to by Foundry Group, BN Capital by Lerer Hippeau, Kickstart Ventures and Gingerbread Capital. Havenly plans to use the new round to expand its offerings by launching a private-label collection that will be available this holiday season, as well as continuing to scale its designer network and invest in technology, according to Lee Mayer, CEO and co-founder of Havenly. Since its launch five years ago, Havenly’s customer base has grown more than 14 times in the past two years alone, with more than 60% of purchasing customers returning for additional design projects.

Sleep Number’s net sales jump 14% in Q3

Sleep Number said third quarter net sales grew 14%, with a 10% comparable sales gain.  Year-to-date net sales increased 12% and operating income grew 46%, officials reported. “Our revolutionary Sleep Number 360 smart beds are delivering life-changing sleep and drove double-digit demand growth on top of double-digit demand growth the prior year,” said Shelly Ibach, president and CEO. “Our multi-year initiatives are resulting in the sales and profit growth we anticipated. We are creating a future where our 360 smart bed will be the hub for consumers’ health and wellness with individualized digital health as core to our business.”

Furniture store sales up 1.1% in September

Furniture and home furnishings stores posted a 1.1% increase in September sales over September a year ago, following the trend this year of fairly anemic gains that trail the broad retail sector. September retail sales were $9.85 billion for the industry, up from a revised $9.74 billion a year ago, the U.S. Department of Commerce reported Wednesday. Sales edged up 0.6% from a preliminary $9.79 billion in August, the latter number revised up from the previous $9.71 billion estimate. Sales for all U.S. retail and food services industries increased 4.1% in September from the same month last year to $525.6 billion, but were down 0.3% from August.

The Kitchen Collection to close all stores

Hamilton Beach Brands Holding Co. is winding down the retail operations of its specialty kitchenware subsidiary.  The maker of household appliances said that it will close all 160 of its Kitchen Collection stores by the end of the year. Sales at the stores, which are located primarily in outlet malls, will start in the next few days and continue through the holiday selling season. The Kitchen Collection has been struggling amid declining brick-and-mortar sales and traffic.

Jewelry & Luxury

Gucci Is the Fastest Growing Luxury Brand in 2019

According to a new study from Interbrand, Gucci is this year’s fastest growing brand in luxury, with the overall category also earning the title of fastest-growing among all sectors. While tech giants Apple, Google, and Amazon still sit atop the rankings for best global brands, the consultancy has notably found that the retail and luxury category has become 2019’s fastest growing sector. Nike sits at 16th in ranking, with Louis Vuitton coming in at a close 17th pace, and Chanel following at 22nd. While Italian luxury fashion house Gucci only takes home the 33rd position, the brand has seen 23 percent growth this year alone in relation to its $15.9 billion USD brand value. Interbrand attributes this success to the company’s leadership in “tapping into concepts of fluidity for Gen-Z, and by incorporating a ‘millennial shadow committee’ into its direction planning.”

British luxury brands fight to keep US customers as tariffs hit

A group representing 250 UK luxury brands caught in the middle of a trade spat between the United States and the European Union is preparing to launch a charm offensive in New York. The trade mission led by industry body Walpole kicks off Monday. It was arranged before US tariffs on $7.5 billion worth of EU goods, including some luxury products, took effect on Friday. But the stakes are now much higher. The tariffs, which result from a dispute over government subsidies to Airbus (EADSF), will make it more expensive for Americans to buy tailored suits made on London’s Savile Row, as well as whisky and cashmere sweaters from Scotland.

Take A Peek Inside Tiffany & Co.’s Chic Men’s Pop-Up At The Grove

Tiffany & Co. is celebrating the launch of its new men’s lifestyle collection with a Men’s Pop-Up at The Grove that will not only showcase the new line, but also display iconic American sports trophies. Over the weekend, a rare public display of four of the world’s most recognized sports trophies including: NFL‘s Vince Lombardi Trophy, the NBA‘s Larry O’Brien Championship Trophy, the PGA TOUR’s FedExCup Trophy and the USTA’s  Men’s US Open Trophy were showcased at the Men’s Shop, with an assist from former NFL star Victor Cruz, who was on hand to celebrate the trophy collection reveal. The brand has been creating these custom-designed trophies at its Hollowware workshop in Rhode Island for the past 160 years.


Office & Leisure

MGM Agrees to Sell Bellagio to Blackstone for $4.25 Billion

MGM Resorts International, pressured by investors to unload its remaining company-owned casinos, agreed to sell the Bellagio resort in Las Vegas to Blackstone Group for $4.25 billion and will continue to operate the property under a lease arrangement. The Las Vegas-based casino company also agreed to sell the Circus Circus property on the Strip, along with 47 adjoining acres, to real estate mogul Phil Ruffin for $825 million, according to a statement Tuesday. With the sales, MGM Resorts moves a step closer to becoming a landless casino company, marking a new era for the largest operator of casinos on the Las Vegas Strip. When all of its deals close, the company will have just two wholly owned properties, including the flagship MGM Grand, remaining under its ownership. The company is keeping a 5% stake in the Blackstone-led venture that’s buying Bellagio. MGM has been restructuring under pressure from activist investors.

Silicon Valley’s biggest investors want your kids to play with these low-tech toys

The $28 billion toy industry is buzzing with high-tech battery-operated gadgets for kids. And yet, Silicon Valley investors, including Google Ventures and the Chan Zuckerberg Initiative (founded by Mark Zuckerberg and Priscilla Chan), have just invested in a startup called Lovevery that makes low-tech, old-school toys. The company just landed $20 million in this Series B round, led by lead investor Maveron Ventures, bringing its total investment to $32 million, setting it up to become an important player in the world of toys. Lovevery, an Idaho-based company cofounded by Jessica Rolph and Roderick Morris two years ago, creates toys that are carefully designed to meet the developmental needs of children. The brand first launched an award-winning Play Gym for infants, then a collection of Play Kits that would take a child through the first two years of life.

Five Below in pilot to open gaming centers in stores

Five Below is getting on board the fast-growing esports craze. The tween and teen discounter retailer is partnering with Nerd Street Gamers, a developer of training and competition facilities for esports. Nerd Street has completed a $12 million financing round led by Five Below to build esports facilities (Localhost) that house leagues, training camps, tournaments, and showcases equipment. Existing investors Comcast, SeventySix Capital, Elevate Capital, and angel investor George Miller also joined in the round. As part of the deal, Five Below and Nerd Street will build 3,000-sq.-ft. Localhost esports gaming centers connected to select Five Below stores, beginning with a multi-store pilot in 2020. Future rollout plans will be based on the results of the pilot. But they could include 70 or more locations during the next several years.

Technology & Internet

Here’s everything Google announced at its big product event

Google unveiled its newest smartphone, the Pixel 4, alongside a revamped pair of Pixel Buds and several new Nest smart home devices at its annual hardware event in New York on Tuesday. Google’s event follows a flurry of hardware announcements from competitors like Microsoft, Apple and Amazon ahead of the holiday shopping season. With its latest range of devices, Google is demonstrating that it still takes hardware seriously, from smartphones to smart home devices. It’s also an example of Google’s goal to bring “ambient computing” to its customers, where connected devices are always listening and helping the user. Here’s a rundown of everything that was announced.

Amazon Has Added Three Million Sellers Since 2017

3.3 million new third-party sellers have joined Amazon marketplaces worldwide since January 1st, 2017, according to Marketplace Pulse research; over a million of which joined the marketplace in the US. Three million equals to 3,317 new sellers every day for the last one thousand days, or 138 every hour, or even two new sellers every minute.

Amazon charges millions for a spot in its gift guide Inc. just released its annual holiday toy guide, telling customers the Lego Disney castle, VTech’s Magical unicorn and more than 100 other items were “thoughtfully curated to help shoppers quickly tackle even the lengthiest holiday shopping lists.” What Amazon doesn’t mention are the millions of dollars it charges the toy industry just to be considered for a spot on the popular gift guide. Amazon sells Holiday Toy List sponsorships for as much as $2 million. The more sponsors pay, the more products they can nominate to be on the list and the more prominently their own products will be featured on the popular website.


Finance & Economy

Consumer spending sank in September amid recession fears

U.S. consumer spending sunk in September by the lowest rate in seven months, according to data released by the Commerce Department.  Sales of retail goods and food services dropped 0.3 percent last month as consumers tightened their belts during a stretch of intense anxiety about a potential recession.  While the U.S. economy has held steady amid global turmoil, it has grown and added jobs at a slower rate throughout 2019. Rising trade tensions and fading foreign demand for American goods have also stunted U.S. business investment, manufacturing activity and exports.


Private Equity Firms Turn to Independent Sponsors As Industry Moves Down Market

Independent sponsors are emerging as uniquely positioned participants in the low to middle market, according to industry experts.  The term independent sponsor typically refers to an individual with industry experience who partners with a traditional PE or other capital provider to invest. They raise capital on a deal-by-deal basis. Not only are they helping dry powder find a home, independent sponsors also diffuse the risk of having to find equity for transactions by establishing relationships with capital providers.  Ballooning valuations are forcing firms to hunt for deals in the lower end of the market, a phenomenon that has opened the door for independent sponsors to ferret out creatively-sourced, proprietary acquisitions, said experts at the McGuireWoods Independent Sponsor Conference in Dallas.


U.S. Home Starts Fall From 12-Year High on Multifamily Drop

U.S. new-home construction in September pulled back from a 12-year high though the key single-family category was stable, signaling the housing market is firming amid low mortgage rates and steady demand.  The report reflects some cooling as starts pull back from the best pace since 2007 the prior month. Building has stabilized amid low mortgage rates, higher wages and a tight labor market, with housing showing signs of positive momentum after remaining a drag on economic growth since 2017.