Investing.com — U.S. consumer confidence hit a three-year high in October, according to Morgan Stanley's latest AlphaWise survey, which tracks the spending intentions of U.S. consumers.
The bank said in a note on Monday that the results show growing optimism about the economy, although spending plans on consumer electronics remain weak.
The survey, conducted between October 24 and 28, is said to have found that consumer confidence has increased, with more Americans reporting a positive outlook on the economy than at any time since July 2021.
“American consumers now have the most positive view of the economy since July 2021,” the bank noted.
Morgan Stanley said high-income households especially felt an improvement in their financial prospects, while confidence among other income groups remained stable.
However, they added that the outlook for consumer electronics spending heading into the holiday season is less encouraging. The survey reportedly revealed a month-over-month drop in short-term electronics spending intentions, a metric that has historically increased in October as consumers prepare for Black Friday and Cyber Monday.
Specifically, net spending intentions on electronics over the next month are said to have fallen to -7%, below previous years' increases.
In a further sign of caution, Morgan Stanley says a net 5% of consumers plan to reduce spending on electronics during the holiday season compared to last year.
In the medium term, spending intentions have shown some improvement, particularly among higher-income households, although the data remains negative overall, according to the bank.
Electronics spending prospects for the next six months increased three percentage points month-over-month to -12%, but still reflect moderate enthusiasm for major purchases.
As the holiday season approaches, survey findings suggest that while consumer confidence is improving overall, expectations for electronics purchases remain subdued.
Morgan Stanley analysts recommend caution for retailers in this segment, as spending intentions have yet to demonstrate consistent positive momentum.
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