Weekly tracking finds year-over-year spending moderating in June after a May surge
PRINCETON, NJ -- Americans' self-reported average daily spending in stores, restaurants, gas stations, and online averaged $66 per day during the week ending June 20, compared with $64 the same week a year ago. This follows a $4 year-over-year increase the prior week. Consumer discretionary year-over-year spending differentials appear to be moderating in June after a May surge.
Upper-Income Spending Volatile, but Down From May
Upper-income consumer spending during the week ending June 20 was up $13 from the prior week and $17 from the same week in 2009 -- after being flat compared with a year ago during the two previous weeks. While those with higher incomes continue to struggle with "frugality fatigue," their spending seems to be moderating in June compared with May.
Middle- and Lower-Income Spending Unchanged
Middle- and lower-income Americans' self-reported spending averaged $59 per day last week -- the same as the $58 of the previous week, and the $59 of the comparable week a year ago. Spending by these Americans has remained in the $53 to $62 range for six of the last seven weeks. The notable exception was the higher average of $84 in the first week of June -- possibly reflecting increased spending for Memorial Day as well as a "paycheck" effect.
Beyond Retail Sales -- Why Upper-Income Spending Is Key
Gallup's self-reported upper-income consumer spending measure surged in May even as chain store sales and overall retail sales disappointed. Together, the data suggest that many consumers with discretionary income decided to increase their spending during May on such things as eating out and traveling, which are included in Gallup's measure, while failing to do likewise for major purchases -- such as autos, appliances, and similar expenditures -- which are not included in the measure.
Hard as it may be to recall, there was a lot of talk about a sharp economic upturn just a couple of months ago, and that may have led some consumers to believe that the days of recession and financial crisis were over. This seemed to combine with the impatience or frugality fatigue on the part of some consumers, particularly those with upper incomes, to create a surge in selected forms of spending in May.
Over the first two weeks of June, frugality seemed to return to fashion -- probably not surprising given May's stock market plunge and the fears of financial crisis in Europe. Still, maintaining frugality appears to be a challenge, as illustrated by the increase in upper-income consumer spending during the week ending June 20.
With middle- and lower-income consumer spending remaining flat as underemployment remains high, it seems that a recovery in overall consumer spending will depend to a large extent on upper-income consumers. It may be that these consumers, despite having a desire to return to spending, have been spooked by recent signs of a weakening U.S. economy, combined with the oil spill in the Gulf, global financial difficulties, and possibly future tax uncertainties. As a result, upper-income Americans, like other consumers, may be returning to the new normal spending levels of 2009. If this turns out to be the case, it could easily mean a slower economy than many had hoped for as the remainder of the year unfolds.
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:
Read more about Gallup's economic measures.
For Gallup Daily tracking, Gallup interviews approximately 1,000 national adults, aged 18 and older, each day. Gallup's self-reported spending results are based on more than 2,000 telephone interviews completed on a weekly basis. For these results, one can say with 95% confidence that the maximum margin of sampling error is ±3 percentage points. Upper-income self-reported spending is based on more than 400 telephone interviews completed on a weekly basis. For these results, one can say with 95% confidence that the maximum margin of sampling error is ±6 percentage points.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 and cellular phones, with interviews conducted in Spanish for respondents who are primarily Spanish-speaking. Each daily sample includes a minimum quota of 150 cell phone respondents and 850 landline respondents, with additional minimum quotas among landline respondents for gender within region. Landline respondents are chosen at random within each household on the basis of which member had the most recent birthday.
Samples are weighted by gender, age, race, Hispanic ethnicity, education, region, adults in the household, cell phone-only status, cell phone-mostly status, and phone lines. Demographic weighting targets are based on the March 2009 Current Population Survey figures for the aged 18 and older non-institutionalized population living in U.S. telephone households. All reported margins of sampling error include the computed design effects for weighting and sample design.
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.
For more details on Gallup's polling methodology, visit http://www.gallup.com/.