U.S. consumers are keeping their jewelry longer
December 13, 2013
Washington, D.C.--Americans are holding on to their jewelry for the longest amount of time since right after the Great Depression, according to data from the U.S. Bureau of Economic Analysis (BEA).
According to data collected by the BEA dating back to 1925, the average age of jewelry in 2012 was 5.3 years, the highest since 1942. This is a slight increase from the average age of 5.2 recorded in 2011.
Jewelry-retaining numbers kept by the BEA hit their all-time peak, 7.2 years, in 1935 and 1936, during the height of the Great Depression.
While jewelry is a highly discretionary purchase--meaning it is not something that has to be replaced, like a car or a washing machine--it’s not the only item consumers are hesitating to replace in the wake of the recession.
Overall, BEA data shows that the average age of consumer durable goods--long-lasting items such as cars, furniture, household appliances, jewelry and the like--is the highest it’s been since 1962 at 4.6 years.
The jewelry category has one of the highest ages of all those included in the BEA report, along with furnishings and household equipment (5.3 years), furniture and furnishings (5.6) and household appliances (5.3).
The BEA’s data shows that, not surprisingly, patterns of consumer spending are dependent on the state of the economy: as the economy enters into a decline, consumer spending goes down and the average age of the consumer durable goods goes up, as they hold on to items longer before deciding to spend money to replace them.
John Silvia, chief economist for Wells Fargo Securities LLC in Charlotte, N.C., recently told Bloomberg that certain purchases are “postpone-able for only so long,” and that a resurgence in spending on household goods is likely. Replacement purchases, as consumer confidence returns to higher levels, could boost the economy and spending back into high gear.
As of now, however, the growth of consumer spending remains slow.
The Commerce Department reported that in October, household purchases, which account for nearly 70 percent of the economy, were up 0.3 percent, slightly higher than the 0.2 percent that was predicted by economists for the month and a small increase as compared with 0.2 percent growth in September.