US consumers have suddenly had an upswing in confidence says a well thought of consumer sentiment index. The Consumer Electronics Association and publisher CNET regularly test the temperature of US sentiment with a quarterly survey designed to get to the bottom of how much US citizens are likely to buy in consumer electronics.
There is little good news about plans to buy CE goods, but there is some considerable confidence in the fact that individual consumers feel that their own plight is getting better. The outlook for technology spending is still pretty stark though.
However the CEA is talking about March as a turning point in the recession. Consumer Sentiment increased in March as measured by the CEA-CNET Consumer Confidence Index to 173.1 (in a score between 100 and 300) ‘ the highest level in over a year. Following more than a week of strong gains in the stock market and positive news from the real estate market, consumers are feeling more confident the economy will improve and that they will be better off financially over the next year.
The outlook for consumer electronics sales on the other hand decreased slightly in March ‘ to its lowest level since the Index started. Consumers remains uneasy about their own job security and continue to constrain consumer spending. The macro effect is likely constraining the micro effect for technology spending ‘ even though some categories, like televisions, remain robust.
Effectively the confidence that households won’t struggle so much comes first and then the desire to buy expensive household CE equipment comes later, or at least that’s what the CEA is hoping.
But right now consumers are continuing to reduce discretionary spending, so expectations around technology spending appear to be impacted as well. In fact the expectation of US citizens buying CE gear dropped to its lowest in three years as shown by the table below (in full pdf version)