Rising Optimism As U.S. Market Heads For Possible Record-Breaking Year

Although it is not certain just yet, with less than two months to go to the end of 2014, something interesting is happening in the U.S. retail jewelry sector. Jewelry and watch sales in the United States in September increased by around 3 percent on the year to $5.52 billion, after putting in a highly respectable rise of 4 percent in August. Consequently, 2014 could yet be a record-breaking year for jewelry and watch sales.

If this trend continues, U.S. sales of fine jewelry and watches could reach a record $81 billion in 2014, up from the prior year’s $77 billion, a gain of 5 percent. After a slow start in 2014, sales of fine jewelry and fine watches in the U.S. market have shown solid gains since May, according to IDEX Online Research.
The rises are in line with the improvement in the state of the U.S. economy through much of this year and with rises in consumer confidence. Following a bleak winter when Gross Domestic Product was negative, the economy grew by 4.6 percent in the second quarter, while official figures earlier this month showed that growth in the third quarter in annualized terms was 3.5 percent.

The increase in sales of polished diamonds and in jewelry and watches set with diamonds has led to a huge sigh of relief from the global diamond and jewelry manufacturing industries. The increases have been a long time coming, said one bourse president. "It's no secret that the United States, even with a lower share of the global diamond jewelry market remains by far the most important. There were times in recent years when we thought its economy might plunge to a double-dip recession. That would have been a disaster and I have no doubt that there would have been a large wave of closures – both manufacturers and retailers – as well as among the wholesalers."

Although the U.S. economic recovery still has some way to go, the positive evidence of recovery continues to mount. The economy is expanding and bringing with it new jobs, meaning more potential consumers with cash in their pockets. Gas prices, which rose to record levels in recent years, have plunged as the price of oil on global markets declines. U.S. stock markets are soaring, bringing a much-needed fell-good sentiment. House prices are recovering, and in some parts of the country are reaching record levels, while new house starts are also very healthy.

Although much of the news is good, it must be balanced out with a look at the situation on the ground. Millions of people are still unemployed or underemployed. Some reports suggest that many of the new jobs that have been created are not positions with high salaries, indeed there are many instances where the main breadwinner in many families is working in, and earning the type of salary, that the family's second breadwinner used to make. That is not the kind of situation that will enable families to have money free for items of jewelry.

Consumer confidence has risen but people are still concerned for their own futures and that of their children. Meanwhile, college costs are continuing to rise to levels that are making a college education a luxury.

And on the political front, the success of the Republican Party in gaining control of the Senate and expanding control of the House of Representatives has served to shine the spotlight on the hugely irresponsible game of politics being played in the United States where the Republicans and Democrats cannot agree on what are often basic issues, and ones on which they were always able to find a compromise in the past.

And the outlook for the diamond industry regarding the United States as this year nears its end and the trade looks to the horizon and the arrival of 2015? If, previously, it was a case of cautious optimism, the situation is currently somewhat more relaxed. There are solid levels of sales, albeit with a degree of trading down, in terms of sizes, clarities and colors.