I keep thinking about a number from last week. Down 7.4%. That is how much fewer washers, dryers, fridges, and stoves Americans bought in the first quarter. The last time it was this bad was 2008.
I don't think most people realize what that means for their wallet. When folks stop buying appliances they are scared. And scared people stop spending on a lot of other things too.
The number came from Whirlpool. You know the company. They make Maytag, KitchenAid, and Amana. The fridge in your kitchen is probably one of theirs. They have been around 115 years. They are the last American maker of big kitchen and laundry machines. They are as American as it gets.
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This week they told Wall Street things are bad. They lost money last quarter. The stock dropped 20% in a single day. And they did something I can't stop thinking about. They cut their dividend. The whole thing is gone.
For folks who hold dividend stocks for income that is a gut punch. Whirlpool was paying $3.60 a year per share. Retirees count on checks like that. Now those checks stop. The board needs the cash to pay down debt instead. They had no choice.
The CFO said the quiet part out loud. She told investors demand has not been this weak since the 2008 financial crisis. Read that again. Not weak like 2020. Weak like 2008.
I have to be honest with you. Whirlpool blamed the war with Iran. They said it spiked gas prices and crushed consumer confidence. That is part of it. But the rot was already there. Builders were already cutting orders. Families were already nursing along busted dishwashers. The war just pulled the rug out.
Here is what worries me most. Whirlpool is the appliance provider for D.R. Horton. That is America's biggest homebuilder. Every new starter home in America has a Whirlpool inside. When their orders dry up that is not just a Whirlpool story. That is new homes nobody is buying. That is young families staying put.
Think about your own neighborhood. The young couple who talked about upgrading. The retirees who swapped out the fridge every five years. Nobody is doing that right now. They are waiting. They are nervous. They are holding on to the cash.
The CEO called it a rapid deterioration in macroeconomic conditions. That is the phrase a CEO uses when he doesn't want to say the real thing. The real thing is that people are scared.
I want you to remember one number. 7.4%. That is how much the U.S. appliance market shrank last quarter. In March alone it was 10%. Numbers like that do not come out of thin air. They come out of kitchens. They come out of laundry rooms. They come out of empty driveways at empty model homes.
Here is what worries me about your portfolio. Whirlpool is the canary. The dividend stocks people own for safety are the next dominoes. Clorox is hurting. Procter & Gamble is hurting. The companies that make the soap and the toilet paper are on the watch list.
When the consumer freezes up every dividend goes on notice. Some will hold. Some won't. Whirlpool just showed us how fast it can happen. One earnings call. One sentence. Dividend gone.
I think about my friend old Maytag. He bought it in 1994. It ran for 22 years. When it finally died his wife replaced it the next week. She didn't even think about it. That is the America Whirlpool was built for.
That America is on pause right now. The washer breaks and folks throw a tarp over it. They make do. They wait. I keep picturing a quiet showroom somewhere in Ohio. The salesman is standing by the fridges. Nobody walks in.
I’m going to keep digging into the inventory numbers for the other big makers. I want to see if this freeze is spreading to the smaller stuff—microwaves and blenders.
More on this tomorrow.
— Lauren
Editor, American Ledger
