Holiday 2021 is here, and as much as we know the US consumer is strong, it’s still important to track which consumer categories are doing well and which are lagging. The last 20 months have seen a series of surprising twists and turns on this front. The Pandemic Recession was absolutely unique in that it saw high demand for many durable goods (automobiles, furnishings, etc). The recovery from that “recession” has been similarly unprecedented in that those same goods continue to see strong consumer interest even though traditional cyclical analysis says any “pent up” demand should have long been satisfied.
Our favorite way to measure US consumer interest is by looking at Google Trends query volumes. People tend to search for information before making a purchase, so it acts as a leading, real-time indicator of demand. Here’s what we found after sifting through a raft of search terms:
#1: US Google searches for “laptop” and “macbook” (5-year Google Trends chart below):
- Interest in these items typically accelerate around back-to-school in late August and peak for the year over the week of Black Friday and Christmas.
- Searches peaked in March 2020 when many Americans had to work or complete school from home. Queries also grew noticeably last year ahead of back-to-school in late August 2020 and Holiday 2020.
- Even after all of last year’s demand, interest still grew going into the holidays this year just as it has in the past. Searches for “laptop” and “macbook” are currently higher than the same week in 2019 (pre-pandemic), up 14.5 and 4.3 pct respectively.
#2: US Google searches for “sofa” and “couch” (5-year chart below):
- Search volumes for both terms usually increase during the weeks of Black Friday and Christmas, likely as Americans try to take advantage of sales.
- Queries climbed during lockdowns in Spring of 2020 as people were stuck at home. They both reached 5-year highs during the week of Black Friday last year.
- Searches for “sofa” and “couch” are currently down only slightly (3.7 pct and 4.0 pct, respectively) versus last year. We believe these still-solid readings are not entirely related to consumers frustrated by shortages caused by supply chain issues, since this has been a problem for many months now.
#3: US Google searches for “iPhone” (5-year chart below):
- US Google searches for “iPhone” typically rise this time of year along with Black Friday sales, and peak in September with new iPhone announcements.
- Queries for “iPhone” have generally declined since 2017, but have been on the rise this year.
- Searches are up 7 pct just now, as compared to 2020.
#4: US Google searches for “pants” (5-year chart below):
- US Google searches for “pants” are at an all-time high and structurally above any level seen in prior years. We consider this a proxy for (mostly male) apparel demand, and the chart below shows why. Searches declined dramatically during lockdowns and only returned to quasi-normal in the back half of 2021.
- Queries for “pants” are up 20 percent versus last year, which tells us that consumers are finally catching up on last year’s deferred consumption in this category.
#5: US Google searches for “TV” (5-year chart below):
- US Google searches for “TV” are currently breaking out. The peak was over Black Friday 2019.
- Queries are slightly down 6 percent from last year, but are climbing quickly.
- Worth noting: Google searches for “TV” span everything from physical sets to streaming services. The one thing all those categories have in common is that they require some form of payment – one time (for hardware) or ongoing (for streaming). As such, “TV” searches are a good proxy for overall consumer spending intentions.
Bottom line: despite rising inflation, the US consumer remains robust and the now almost 2-year electronics and home upgrade cycles continue even now. Should the recent pandemic variant start to impact US consumer behavior, we can see how some categories (apparel, for example) might go dormant again. If that occurs, we would expect to see tech hardware and furnishings demand increase, just as they did in 2020. As we said at the top of this section, the last 2 years have been the most unusual “cycle” we’ve ever seen and, given recent headlines, it may not revert to normalcy any time soon.