NEW YORK (CNN/Money) -
It's no surprise that sales of power generators got a jolt during the Blackout of '03. What will be surprising -- and worrisome -- is if home generators keep selling like hotcakes now that the juice is back on, according to one Wall Street analyst.
Almost immediately after the lights went out Thursday across several northeastern U.S. cities, retailers such as Home Depot (HD: Research, Estimates) and Sears Roebuck & Co. (S: Research, Estimates) shipped thousands of extra home generators to their stores in affected areas. Lowe's (LOW: Research, Estimates) told Reuters it sold about 2,000 generators "in a very short period of time."
This is not rocket science -- in the 21st century, in the world's biggest economy, people don't like to go too long without power.
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Now that electricity is flowing again, generator sales would seem likely to fall off as Americans return their attention to more important things, such as the start of football season.
But if people still are buying generators even when the lights are back on, it could hint at a weakening of consumer confidence, Richard Bernstein, Merrill Lynch's chief U.S. investment strategist, said in a research note Friday afternoon.
"The more generators sold, the more consumer confidence has been hurt, as this would tend to indicate that people do not trust the infrastructure currently in place," Bernstein said. "If, however, consumers shrug off the ... situation and relatively few generators are sold, then this would be perceived as a positive."
Wall Street keeps close tabs on consumer confidence, since consumer spending makes up more than two-thirds of the total economy.
Consumers don't always spend according to how they feel; their confidence was shaken after the Sept. 11, 2001, terrorist attacks, for example, but they still managed to spend quite a lot of money on new cars.
Confidence has slipped in recent months, as the labor market has continued to suffer from the longest stretch without job creation since World War II, according to Labor Department statistics.
The fear is that consumers, who are deeply in debt and worried about their jobs, might delay any wild spending sprees if they're worried about more fundamental stuff such as safety and electricity. And the blackout is likely to stay in the news for some time, as politicians and policy makers debate its causes and ways to prevent future blackouts.
But some economists thought it unlikely that distrust of the electrical grid would hurt confidence enough to slow down spending or economic growth.
"People buying generators sounds more like a smart insurance plan to protect some of their assets, rather than a sign they're living in fear," said Richard Yamarone, chief economist at Argus Research in New York. "It may dampen people's outlook a little bit, but not in a way that would translate into weaker spending."
It's too early to tell if generator sales are still strong. Neither Lowe's nor Home Depot would disclose their sales over the weekend, but both said they'd shipped more than 5,000 extra generators to blackout areas.
"It's hard to predict whether this will become some sort of a cultural phenomenon, or if it's just something that's of the moment," Home Depot spokesman David Sandor said.
Home Depot stores in the Brooklyn and Flushing areas of New York City still had generators available, but stores in Queens and the Bronx were sold out, and the store in Secaucus, N.J., said it had a backlog of customer orders.
Lowe's in North Bergen, N.J., six miles from New York City, was sold out of generators, but the Lowe's in Toms River, N.J., 51 miles from New York, still had some available.
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