Consumer Confidence Takes a Hit in July28 Jul, 2009 By: Erik Gruenwedel
Consumer confidence in the overall economy, including consumer electronics and technology, dropped in July to its lowest level this year, according to new data from the Consumer Electronics Association (CEA) and CNET.
CE sales key to home entertainment include Blu-ray players, home theater systems and high-definition televisions.
The CEA-CNET Index of Consumer Expectations (ICE) slumped to 165.9, ending two consecutive months of positive gain. The ICE, which measures consumers’ confidence in the overall economy, is down nearly nine points from June and is at its lowest level since October 2008.
“Consumers faced a setback this month with the latest economy news,” said Anne Claudio, VP of Research at CBS Interactive, which owns CNET. “Recent unemployment figures hitting their highest level in 26 years, the rising cost of gasoline prices and declines in household net worth due to the housing market are causing consumers to feel hesitant about an economic recovery in the near term.”
Consumer confidence in CE and technology also fell to its lowest level in more than a year. The CEA-CNET Index of Consumer Technology Expectations (ICTE) dropped to 76.6, a decrease of nearly eight points from last month. The ICTE, which measures consumer confidence in technology and consumer electronics, is down four points from this time last year.
“Consumer expectations around tech spending mirrored the decline in consumers’ confidence in the economy,” Claudio said. “With job employment concerns top of mind for many consumers, people are being cautious with their spending and could be saving for the back-to-school and holiday seasons.”
Last month the National Retail Federation said sales at electronics and appliance stores increased 0.9% adjusted month-to-month in June but decreased 10.2% unadjusted year-over-year.
“Although several economic indicators are starting to show signs of improvement, it is going to take a few more months — maybe longer — for people to feel comfortable spending again,” said Rosalind Wells, chief economist of NRF. “High unemployment and other uncertainties will continue to impact consumer spending through the remainder of this quarter.”
Indeed, Verizon Communications, which celebrates the one-year anniversary of its fiber optic service FiOS TV July 28, said it would cut more than 8,000 jobs before the end of the year.