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Higher Consumer Confidence May Jolt Electronics Sales

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.

4 comments on “Higher Consumer Confidence May Jolt Electronics Sales

  1. Barbara Jorgensen
    November 2, 2012

    Bolaji: Thanks for compiling these positives together–it definitely helps the outlook for Q4. Q3 news is still coming in and most of it is ugly. It's hard to be optimistic about Q4 but that's largely anecdotal at this point. These reports put some data behind reasons to feel upbeat. I much prefer optimism, personally and professionally.

  2. bolaji ojo
    November 2, 2012

    As long as the numbers are correct!

  3. _hm
    November 4, 2012

    This is quite encouraging news. Better days are ahead and after election it will expedite further. We hope see cheerful Xmas.

     

  4. Shelly
    November 5, 2012

    With the coming of holiday period including Thanksgiving Day, Christmas and Chinese Spring Festival, more manufacturers launched new products, resulting in price cutting of prodcuts, despite consumer confidence upbeat, the industrial condition will still have some changement; just like Chinese  eight-day holiday (the National Day and Mooncake Day), didn't largely promote the consumption market; in addition. the US presidental election result will also bring a influence to the market in the fourth quarter.

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