Majority of those spending less say pattern will be new normal
WASHINGTON, D.C. -- Thirty-seven percent of Americans say they have been spending less money in recent months than they used to, continuing the improvement in the trend since 2010. At the same time, 30% of Americans say they are spending more money, up from 17% in 2010, and 32% say they are spending the same amount.
These data are from Gallup's annual Economy and Personal Finance survey, conducted April 3-6.
Americans' reports of changes in their spending habits are not in line with their preferences. In the same poll, Americans by a wide margin say they enjoy saving over spending. Although they say they prefer to save rather than spend -- which would suggest lower spending -- the percentage of Americans who report spending less has declined precipitously in recent years, suggesting the "new normal" pullback in spending during the recession and immediate post-recession period is ending.
These findings are consistent with trends in Gallup's monthly spending data, which also show much higher levels of reported spending now than in 2009-2011. Gallup does not ask about recent saving behavior, though it is possible that Americans are saving more and spending more if incomes are rising.
Majority of Those Spending Less Say It Will Become the New Normal
Most Americans who are spending less see it becoming their new, normal behavior. The 37% of Americans who report spending less includes 27% who see this change as their new, normal pattern, while only 10% see this as a temporary change.
The percentage of Americans who say they are spending less and that it is their new normal is down from 38% in 2010. Since 2009, Americans who are spending less have been much more likely to say this is their new normal rather than a temporary change. As might be expected, the downtick in the overall percentage who are spending less has come mostly from those who say their spending less was temporary. This percentage has declined sharply from more than 20% in 2009 to only 10% now. In short, it appears that the temporary negative effect of the recession and economic downturn on spending is winding down, leaving only the hard core of those who claim to have settled into a new, normal pattern of spending less.
Conversely, of the 30% of Americans who report spending more in recent months, the majority see the change as only temporary (19%) rather than their new normal (11%). This is potentially worrying from an economic standpoint because the overall trend suggests that these spending increases are not going to be sustained but are only short-term spikes out of necessity.
Economic momentum is rooted in increasing levels of consumer spending, which accounts for roughly 70% of U.S. gross domestic product. While there was improvement in consumer spending this past year, there's still some apprehension and lack of confidence in the U.S. economy's direction, though clearly economic confidence is much greater than in 2009-2011.
Increased spending is a key to continued economic growth. And while Gallup's consumer spending estimates suggest the "new normal" period of spending may be ending -- if not over -- at the same time, in the last few months consumer spending, though robust, has been flat.
Results for this Gallup poll are based on telephone interviews conducted April 3-6, 2014, on the Gallup Daily tracking survey, with a random sample of 1,026 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, the margin of sampling error is ±5 percentage points at the 95% confidence level.
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 time zone within region. Landline and cellular 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 most recent Current Population Survey figures for the aged 18 and older U.S. population. Phone status targets are based on the most recent National Health Interview Survey. Population density targets are based on the most recent U.S. 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.