U.S. Consumers Pulling Back on Spending in AugustConsumer spending of $61 per day is down from the prior week's average of $66 by Dennis Jacobe, Chief Economist
PRINCETON, NJ -- Americans' self-reported spending in stores, restaurants, gas stations, and online averaged $61 per day during the week ending Aug. 29. So far, August and back-to-school 2010 spending trends appear no better than those of August 2009.
Self-Reported Spending Suggests "New Normal" Continues
Gallup's consumer spending measure averaged $68 per day in July and $67 in June -- up $6 on average from prior-year comparables, and at the upper end of the 2009 "new normal" monthly spending range of $59 to $67. The July results seem consistent with Monday's report of a 0.4% increase in personal spending in July 2010.
At this point, consumer spending in August is running below that of June and July, falling back to roughly the $65-per-day average of August 2009. This is consistent with perceptions of a continued weakening of the U.S. economy and tepid back-to-school sales.
It is also consistent with recent downward trend in consumer confidence as reflected by Gallup's Economic Confidence Index. Gallup's index predicted the slight uptick in last week's Reuters/University of Michigan consumer sentiment index, and suggests a similar upward nudge in Tuesday's consumer confidence index report from the Conference Board. However, Gallup's index already shows confidence continuing to decline late in August -- falling below its average July levels.
A disappointing back-to-school sales season, declining consumer confidence, and a weak job market suggest that the perceived weakening of the U.S. economy is the reality on Main Street. Federal Reserve Chairman Ben Bernanke's "I've got your back" speech on Friday may have made Wall Street feel better for a day or so. However, it will likely take concrete, measurable action -- not just the Fed's announcement of its good intentions to help if necessary -- to build Americans' consumer confidence, stimulate consumer spending, and help small businesses increase their revenues and cash flow.
Gallup.com reports results from these indexes in daily, weekly, and monthly averages and in Gallup.com stories. Complete trend data are always available to view and export in the following charts:
