Americans are spending more on electronics like iPads and flat-screen televisions and less on durable goods like furniture, washing machines and lawn mowers, according to government data released Tuesday.
The shift reflects a change in priorities for American consumers. After pouring money into all aspects of their homes during the previous decade, consumers are redirecting their purchases to eye-grabbing technology and socking away more of what’s left over into savings. Apparel company executives are worried the lure of electronics will eat into their sales as the back-to-school season gets under way.
Outlays for televisions, computers, video and telephone equipment grew 1.8% in the first six months of this year, compared to the first half of pre-recession 2007, the Commerce Department said Tuesday. By comparison, spending on appliances decreased 3.6% during the same period, and spending on furniture decreased 11% during that time.
Overall, consumer spending stayed flat in June from the previous month, the Commerce Department said Tuesday. Meanwhile, the U.S. savings rate ticked up to 6.4% in June from the previous month, its highest point in a year and far above its pre-recession level.
David Wu, a Los Angeles high school teacher, says he has spent about $4,000 on new technology over the past two years that included a high-tech mobile phone and a large-screen television. The 25-year-old says that because computers and other electronics are constantly evolving, he has an incentive to keep buying the latest items.
“With a toaster and microwave,” he says, “as long as it works, I don’t see myself buying a flashier one.”
In all, Americans spent $534 billion on durable goods of all sorts—items designed to last three or more years—in the first six months of the year, the Commerce Department said. That’s 5.9% more than they spent on these items in the first six months of last year, and 7.5% less than in the first six months of pre-recession 2007.