Tuesday, December 14, 2010

Consumer Sentiment Rises In December

From Counselor Magazine...Analysts are now forecasting the best holiday shopping season in four years as confidence, spending and expectations among consumers are all continuing to trend higher, according to a pair of new surveys. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment in December has risen to 74.2, reaching its highest point since June. Meanwhile, separate findings from a CNBC survey show 60% of Americans plan to spend more for holiday gifts this year, a 10% improvement compared to 2009.

With consumers' optimism increasing, the National Retail Federation is now predicting that November-to-December sales will rise by 2.3% this year, compared to 2009. The International Council of Shopping Centers recently said it expects December sales to improve as much as 3.5%.

"I would generally say that the core customer is absolutely back shopping," said Neiman Marcus CEO Karen Katz.

Believing the economy is strengthening, consumers are more likely to buy big-ticket items this year, data also shows. For example, one in six Americans expects to give or receive an Apple product, like an iPad or an iPhone. Only matched by Wal-Mart, electronics retailer Best Buy is now a top choice for purchases, with 48% of Americans saying they will spend money at a big box store this holiday season. Internet sales have reached watershed marks this year as well, with roughly 25% of consumers in the U.S. saying that shopping on the Internet is one of their top two choices for spending, the largest percentage ever.

Looking beyond December, data from the surveys shows 37% of Americans expect the economy will improve in 2011, while just 20% believe it will get worse. Optimism about wages is increasing, too, with workers expecting earnings gains of 2.1% in 2011, up from 1.3% a year ago. For the first time since 2007, the majority of Americans feel the value of their homes will rise in the next year as well.

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