Americans' Spending Reports Retreat After August Surge
Economy

Americans' Spending Reports Retreat After August Surge

Average daily spending estimate in September down to $84 from $95

PRINCETON, NJ -- Americans' self-reports of daily spending averaged $84 throughout September, down sharply from August's $95, and the lowest monthly figure since February. The August average had been the highest in any month in five years. Though down, the September average remains above the levels Gallup measured from 2009-2012, and is the highest for any September since 2008.

Trend in Self-Reported U.S. Average Daily Spending, Monthly Averages, 2008-2013

The results are based on Sept. 1-30 Gallup Daily tracking. Each day, Gallup asks Americans to report how much they spent the prior day, excluding major purchases such as a home or car and normal household bills. The data give an estimate of discretionary consumer spending.

In the six years Gallup has tracked spending, the September estimates have typically been lower than the August estimates. Thus, last month's decline is not unexpected, although it is a significantly larger decline than what Gallup recorded in prior years.

Changes in August to September Average Daily Spending Estimates, 2008-2013


In fact, the one-month decline of $11 ranks among the largest Gallup has measured since 2008. Declines of that magnitude are more commonly found between December and January, reflecting the typical surge in spending around the holidays and the pullback the following month. The other recent major declines in spending came near the beginning of the 2008-2009 recession.

Largest Month-to-Month Declines in Gallup Average Daily Spending Estimates, 2008-2013

In addition to the typical August to September decline, the drop in spending last month could have been influenced by the decline in Americans' confidence in the economy over the course of the month.

Spending Down Among Most Subgroups

Self-reported spending declined by an average $15 among upper-income and $10 among lower- and middle-income Americans in September.

Recent Trend in Self-Reported U.S. Average Daily Spending, by Annual Household Income, 2013

However, the $10 decline for lower- and middle-income Americans was concentrated among those whose annual household incomes range between $60,000 and $90,000. Spending among this group declined from $122 per day in August to $87 in September. There was a smaller $6 decline, from $81 to $75, among those in the $24,000 to $60,000 range, and no change among those whose incomes are less than $24,000 per year.

Spending in September fell below the $100 mark for Americans between the ages of 30 and 49 for the first time since March. It also dipped below $100 for those aged 50 to 64, men, and parents of young children. The declines tended to be greater among groups whose spending is usually higher than that of other groups.

Comparison of August and September 2013 Daily Spending Averages, by Subgroup

Implications

The August increase in spending, observed in Gallup's self-reported measure and in government estimates, was clearly an encouraging sign for the economy. Spending estimates from Gallup and the government seem to indicate that consumers are moving beyond the "new normal" period of more limited spending observed from 2009 to 2012.

However, the higher spending levels Gallup measured in August were not sustained in September. With consumer spending such a key component of U.S. economic growth, the pullback suggests a full recovery from the recession may still be a ways off.

To the extent Americans' decreased spending is tied to concerns about the larger economy, driven to a large degree by the run-up to, and commencement of, a federal government shutdown, it suggests the effects of the government's budget stalemate go well beyond the temporary halting of non-essential government services. And progress toward a full economic recovery may be on hold until the government successfully addresses the budget situation, as well as the coming Oct. 17 deadline to raise the federal debt limit.

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:

Daily: Employment, Economic Confidence, Job Creation, Consumer Spending
Weekly: Employment, Economic Confidence, Job Creation, Consumer Spending

Read more about Gallup's economic measures.

View our economic release schedule.

Survey Methods

Results for this Gallup poll are based on telephone interviews conducted Sept. 1-30, 2013, on the Gallup Daily tracking survey, with a random sample of 15,346 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.

For results based on the total sample of national adults, one can say with 95% confidence that the margin of sampling error is ±1 percentage point.

The margin of error on the mean estimate of spending is ±$4.

Interviews are conducted with respondents on landline telephones and cellular phones, with interviews conducted in Spanish for respondents who are primarily Spanish-speaking. Each sample of national adults includes a minimum quota of 50% cellphone respondents and 50% landline respondents, with additional minimum quotas by region. Landline and cell telephone numbers are selected using random-digit-dial methods. Landline respondents are chosen at random within each household on the basis of which member had the most recent birthday.

Samples are weighted to correct for unequal selection probability, nonresponse, and double coverage of landline and cell users in the two sampling frames. They are also weighted to match the national demographics of gender, age, race, Hispanic ethnicity, education, region, population density, and phone status (cellphone only/landline only/both, and cellphone mostly). Demographic weighting targets are based on the March 2012 Current Population Survey figures for the aged 18 and older U.S. population. Phone status targets are based on the July-December 2011 National Health Interview Survey. Population density targets are based on the 2010 census. All reported margins of sampling error include the computed design effects for weighting.

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 www.gallup.com.

Gallup http://www.gallup.com/poll/165278/americans-spending-reports-retreat-august-surge.aspx Gallup World Headquarters, 901 F Street, Washington, D.C., 20001, U.S.A +1 202.715.3030