Surge in consumer mood continues
PRINCETON, NJ -- Gallup Poll Daily tracking for the week spanning Monday, March 30 through Sunday, April 5 finds that the mood of America's consumers continues to improve, as it has for each of the last four weeks. Gallup's Mood Index is at -75, the most positive since mid-February 2008, and, for the second week in a row, daily consumer spending increased slightly, from $62 to $71, continuing to hold out the promise that the uptick in positive attitudes may be followed by the much-awaited upward movement in consumer spending.
(Maximum possible value of 200; minimum possible value of -200)
The Gallup Consumer Mood Index improved to -75 for the week ending April 5, up 6 points from -81 for the week ending March 29. The Index has now improved for four consecutive weeks. By a slight margin, the Index is as high as it has been in well over a year, since the week of Feb. 11-17, 2008, when it was at -74.
The Consumer Mood Index is based on answers to two questions -- one asking about current conditions and the other about the direction of the economy. Although responses to these two questions remain much more negative than positive, the level of that negativity has moderated significantly over the last month or so.
The main driver in the overall Index value's improvement has been the public's views of the direction of the economy. The percentage saying the economy is "getting better" has increased for the fourth week in a row, moving up to 32% for the week ending April 5 -- more than twice the 15% of mid-February. The percentage saying the economy is getting worse is at 62%, which, although still quite negative, is the least negative reading on this measure since January 2008, when Gallup began its daily tracking. The "net" difference between these two values is now -30 points.
On the other dimension -- ratings of the current economy -- the percentage of consumers rating the economy "poor" has remained at 55%, the same as last week, but is as low as it has been since mid-January. Still, only 1% of Americans are willing to rate the economy as "excellent," while a modest 9% say it is "good," for a net current conditions score of -45. When Gallup began its Consumer Mood Index in January 2008, the "excellent" and "good" numbers were 4% and 27%, respectively.
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Americans last week reported spending an average of $71 per day in stores, restaurants, gas stations, or online. This represents the second consecutive weekly increase of $9 in reported average spending, recovering from the $53 daily average for the week of March 16-22, which was the lowest average since Gallup began tracking this measure in January 2008.
A year ago, for the week of March 31-April 6, 2008, spending was slightly higher than it is today, at $80. Importantly, spending began to increase in mid-April and May of last year, reaching the highest weekly average on record during the week of May 26-June 1, 2008. There were no doubt a number of reasons for this increase in spending. It is possible that the sharp increase represented a seasonal effect coincident with the onset of the summer months and, if so, it can be expected that everything else being equal, spending will continue to increase this year as well. Gallup's spending data are based on Americans' self-reports of the total amount of money they spent the prior day on purchases other than a home, a motor vehicle, or their normal monthly bills.
(Maximum possible value of 100; minimum possible value of -100)
Despite the encouraging news that Americans' economic mood has become more positive, there has been no evidence from Gallup Poll Daily tracking that the nation's job market is beginning to recover from its severe problems. For the week ending April 5, the Gallup Net New Hiring Index was at -8, down from -4 over the previous two weeks, and, by 2 points, the lowest Index value Gallup has reported since it began measuring net new hiring in January 2008. The underlying measure that makes up the Index shows that last week, 21% of full- and part-time workers said their employers were hiring people and expanding the number of employees in their workforces, while 29% reported their companies were letting people go and shrinking the size of their workforces.
(Maximum possible value of 200; minimum possible value of -200)
The Gallup Standard of Living Index has become slightly more positive, registering 46 for the week ending April 5 -- up from 44 the previous week, and 39 the week before that. This is the highest level for the Index since mid-January.
The Standard of Living Index is based on two questions -- one asking about respondents' satisfaction with their current standard of living and the other about the perceived direction of their standard of living. This past week, almost as many consumers said their standard of living is getting better (38%) as said it is getting worse (39%). Overall, 73% of consumers said they are satisfied with their standard of living -- little changed from previous weeks..
(Maximum possible value of 100; minimum possible value of 0)
The Gallup Consumer Worry Index is at 34 for the week ending April 5 -- unchanged from the previous week. The percentage of Americans who worried about money "yesterday" thus remains slightly more positive in a broad sense than it has been for the past several months. At one point last October, Gallup's weekly Consumer Worry Index was as high as 45%, and it was at or above the 40% level for a number of weeks in September through December. This measure is generally quite stable; a year ago, March 31-April 6, 2008, it stood at 33%, almost identical to where it is today.
The most significant change in recent weeks across Gallup's consumer tracking measures has been the sharp uptick in overall consumer mood. Gallup's Consumer Mood Index is now more positive than it has been in over a year, and has continued to climb upward for the past four weeks.
This increase almost certainly reflects in part the substantial increase in stock market averages since the week of March 9, as well as perhaps a reaction to the Obama administration's numerous steps to jump-start the recessionary economy. In addition to the increase in positivity in this projective measure of how Americans view the national economy, this is the third week in a row in which Americans have reported at least a marginal increase in Gallup's more personal Standard of Living Index. The latter is important, because without growth in the public's sense of personal confidence, there are less likely to be sustained increases in retail activity.
Additionally, there has been a slight uptick in Gallup's Monitor of Consumer Spending for the second week in a row, suggesting that a turnaround in spending may indeed be in the offing. Last year's trend shows that spending jumped as June approached, perhaps reflecting a "summer is coming" spending effect. If this is the case, then the probability of spending continuing to increase this year would seem to be higher.
The most negative factor is jobs. Gallup's Net New Hiring Index has shown no improvement whatsoever in recent weeks, reflecting the dour observations of thousands of workers interviewed by Gallup who simply don't see their companies beginning to hire more. This measure may be the last to change. If so, it will be the most convincing evidence of all that the country is pulling out of the recession when the measure moves back into substantially more positive territory -- that is, the situation in which more American workers say their companies are hiring than say their companies are firing and letting people go.
For Gallup Poll Daily tracking, Gallup interviews approximately 1,000 national adults, aged 18 and older, each day. Gallup's consumer series includes the Gallup Consumer Mood Index (evaluating public perceptions about the U.S. economy), the Gallup Monitor of Consumer Spending (a measure of how much money Americans are spending each day on mainly retail purchases), the Gallup Net New Hiring Index (a measure of employee perceptions of hiring conditions where they work), the Gallup Standard of Living Index (evaluating the public's perceptions about its own standard of living), and the Gallup Consumer Worry Index (a measure of the degree to which Americans are worried about their finances).
The Standard of Living Index is based on questions asked of all respondents; the Gallup Consumer Mood Index, the Gallup Monitor of Consumer Spending, and the Gallup Consumer Worry Index are based on random half-samples of approximately 500 national adults, aged 18 and older, each day. The Gallup Net New Hiring Index is based on a sample of approximately 250 current full- and part-time employees each day.
The sample sizes and associated margins of error for weekly results for the week of March 30-April 5 are:
Interviews are conducted with respondents on land-line telephones (for respondents with a land-line telephone) and cellular phones (for respondents who are cell-phone only).
In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.