Strong Holiday Spending Predicted

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Strong demand for video game consoles, laptop computers and cellphones will help the consumer electronics industry ring up a 7.4% sales increase in the U.S. this holiday season, an industry trade group predicted today, the Los Angeles Times reports.


Americans are expected to buy $48.1 billion worth of electronic gadgetry in the fourth quarter, up from $44.8 billion last year, the Consumer Electronics Assn. said.


Although consumer electronics sales are expected to outpace the overall retail sales growth rate of about 4%, shoppers’ economic worries mean the industry probably won’t grow as fast as it did last year.


The projected growth rate is about half of that experienced during last year’s holiday quarter, when consumers snapped up flat-panel televisions and digital cameras in record numbers, fueling industry sales by 15%.


“It’s important to remember that this year’s increase comes on top of last year’s phenomenal growth,” CEA research director Joseph Bates said.


Tempering growth this year is the slump in the housing market and slower job creation, CEA economist Shawn DuBravac said. On the other hand, he said, low unemployment levels and a steady increase in average incomes mean consumers will continue to spend this Christmas.


Devices that tap into people’s desire to connect, share and communicate are likely to sell particularly well this year, DuBravac said. Those include digital cameras with the ability to wirelessly upload pictures to social networking websites, cellphones that capture and share video, and game consoles that let players chat and find opponents via the Internet.


Read the full L.A. Times story

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