Forty-seven percent say they are cutting back, down from 57% in February
PRINCETON, NJ -- In line with Gallup's reports of recent consumer spending increases, 47% of Americans say they have been spending less money in recent months than they used to -- still a fairly high number, but down significantly from 57% in February. Twenty-two percent say they have been spending more money -- up from 17%.
Gallup has asked Americans this question about their spending intentions four times since April 2009. The current 47% who say they are "spending less" is lowest of the four readings by a few points. However, the percentage who say they are "spending more" is no different from what was registered last July.
Fewer Americans Spending Across Demographic Groups
Women and men are about equally likely to say they are cutting back on their spending, but both groups are doing so to a lesser degree than was true just three months ago. Younger Americans aged 18 to 29 are less likely to say they are cutting back than are their older counterparts. Liberals are less likely than conservatives to say they are cutting back. Fewer upper-income than lower-income Americans are cutting back, as are fewer of those who are not married.
Spending and Saving Preferences May Be Changing Once More
Throughout 2009 and into February 2010, a Gallup measure of saving vs. spending preferences suggested that the recession and financial crisis resulted in a significant change in the way many Americans feel about spending and saving. However, based on May's results, spending and saving preferences may once again be shifting. Forty-four percent of Americans now say they more enjoy spending than saving -- up from as low as 35% in February. Similarly, 50% now say they more enjoy saving, down from 62%. May's spending and saving preferences are now back to where they were in December 2008 and in prior years of this decade.
Shifting Consumer Psychology
Gallup's May results, which show that fewer consumers have been cutting back on their spending, are consistent not only with recent findings from Gallup's spending measure but also with the improvement in job market conditions compared with earlier in the year. Gallup's modeling suggests that an improvement in Gallup's Job Creation Index leads to increased spending, with some lag.
While this is clearly good news for the nation's retailers, it is tempered by the fact that after two years of recession, nearly half of all Americans across most demographic groups continue to say they are cutting back on their spending. On the other hand, these survey results also suggest that not only are fewer Americans cutting back, but also an increased percentage say they more enjoy spending than saving.
Over the past decade -- but prior to the full impact of the recession and financial crisis in early 2009 -- nearly half of all Americans acknowledged their enjoyment of spending. For more than a year since then, that consumer psychology seemed to have changed, with a significant shift away from spending toward saving. Although one month's survey results are far from conclusive, May's results suggest the old pre-recession psychology could be returning, at least in part.
Still, 30% of all American consumers continue to say cutting back on their spending will become their new, normal pattern for years ahead -- not much different from the percentage during most of 2009 -- and a marked change in consumer psychology from the past.
Results are based on telephone interviews with 1,029 national adults, aged 18 and older, conducted May 3-6, 2010. For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±4 percentage points.
Interviews are conducted with respondents on landline telephones (for respondents with a landline 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.