The electronics market may still wring out a respectable finish to the year if rising consumer confidence in the United States translates into strong sales during the Thanksgiving and Christmas holiday period.
A recent report from the Conference Board, an industry organization that monitors conditions in the US economy, says consumer confidence surged in October to its highest level since February 2008, boosted by a sense of steady improvements in the employment market. The industry body also says consumers feel better about their finances, and this belief is being reflected in their response to the Conference Board's survey.
"Consumers were considerably more positive in their assessment of current conditions, with improvements in the job market as the major driver," says Lynn Franco, Director of Economic Indicators at the Conference Board, in the statement cited above. "Consumers were modestly more upbeat about their financial situation and the short-term economic outlook, and appear to be in better spirits approaching the holiday season."
The Conference Board says consumers are "more optimistic" about the short-term outlook, while businesses also believe conditions are steadily improving. While consumer confidence remains well below the levels that demonstrate a high level of optimism, the improvement could do wonders for retailers and other segments of the economy in the November-December period. If sentiments remain as strong in November as they were in October, buyers could spend more during the holidays than many were expecting.
The Conference Board goes on to say:
Those claiming business conditions are "good" rose to 16.5 percent from 15.3 percent, while those saying business conditions are “bad” edged down to 33.1 percent from 33.8 percent. Consumers' appraisal of the labor market was also more positive. Those stating jobs are "plentiful" increased to 10.3 percent from 8.1 percent, while those claiming jobs are “hard to get” declined to 39.4 percent from 40.7 percent.
That's not the only piece of heartwarming news the industry has received in the last few days. The latest US employment data confirms why consumers are feeling a little more bullish about the economy. Earlier today, the Labor Department reported employers lifted payrolls in the non-farm sectors by 171,000 in October, leaving the unemployment number at 7.9 percent. The news cheered investors and helped to boost stocks in early trading on Friday.
"Our unemployment rate has dropped by more than two percentage points under President Obama. Unemployment Insurance claims are at a four-year low, Consumer sentiment is at a four-year high. We've added more than a half-million manufacturing jobs over the last 32 months. And we just posted the largest 12-month increase in housing permits since 1983," said Hilda Solis, Secretary of Labor, in a statement.
Electronics manufacturers will be heartened by the news. Higher consumer confidence typically translates into higher spending during the end-of-year holiday season, when consumer electronics makers can expect a mini-bonanza as shoppers snap up the latest gadgets for family and friends. If consumers spend more on gifts in November and December, the increased sales could help improve the expected performance of the entire electronics sector in 2012, and transform what many were expecting to be a dull close to the year.