Consumer Confidence Index

Implications: Some of what we report is a self fulfilling prophecy We are not one number, driving to one result Consumers will be selective in their indulgences

Analysis:  Having spent my entire career in the consumer electronics world of retailing, I shudder each time the media blankets the consumer with the doom and gloom messages that portend recession, prolonged recession or worse. Clearly the micro economics of the consumer's behavior are much more complex and dynamic than one single number and based on the industry, may or may not be relevant.

Most are expecting the new Apple i-phone to be one of the hottest new products this year and I believe the estimates for its sales are being underestimated.

Gaming continues to be strong with backlogs on the Nintendo Wii product continuing.

HDTV will continue to have a good year in unit sales as we approach the analog cutoff next February. It is estimated that the LCD flat panel portion of the industry will experience a 40% unit increase over 2007. Over 16,000,000 coupons have been applied for to take advantage of the convertor box program since its inception.

The home PC market has been relatively strong this year in unit and dollar sales as many people have taken to the lower prices available on laptop products. Apple continues to gain share as its computers enjoy some of the halo created from the popularity of the i-pod and their ease of running PC based programs.

GPS unit sales have been running at or above 100% ahead of last year.

These are just some of the areas of the consumer electronics world that have been performing well. While there are parts of the country that have been experiencing a slowdown due to the home foreclosure rates, auto manufacturing sectors or other industries that are not doing well, if you look at states that produce energy, grow food or are benefiting from the ongoing increases in exports, the local economies are a different story.

If you look beyond the numbers as a single determining direction and look into the specifics of the different demographics you will get another picture altogether.

It is true we are experiencing the aftershock of a credit hangover. People have extended themselves into buying more house than they could afford, SUV's they can't stomach to fill at the gas station and other behaviors which are not healthy long term.

As these mistakes cycle through the overall economy, for every loser there will be a winner. While truck and SUV sales are down, you can't find a Toyota Prius on a car lot. For every real reduction in housing values in the overheated markets of LA, Las Vegas and Florida, housing become truly affordable for more people living in those areas.

For every vacation canceled due to high gas prices, somebody may decide to buy a new gadget for their home.

As manufacturers see increases in transportation costs, there are industries that may rationalize bringing manufacturing back to the US.
 
While it convenient to look at one number and make the assumption that all industry will suffer, the wisdom is recognizing what these shifts in behavior mean and where the winners are that balance the media's love of bad news.

It is true that things may seem worse than the house of cards which was being built through the utilization of "stupid credit" the last few years. But we need to keep it in perspective so that we don't risk chasing away the consumers who haven't been directly affected. You can only read the headlines so often before this becomes your reality as well, justified or not.