American consumers spent an average of $94 a day in August, basically flat compared to July but much higher than August 2009's $65 average, according to the most recent Gallup poll on the topic.
That, combined with new consumer confidence and household spending reports, paints a picture of the American economy as somewhat tentative, though certainly improved since the recession.
A separate Gallup poll found the U.S. Economic Confidence Index "stable" at -16. Democrats express more consumer confidence than Republicans. Higher-income Americans are more confident than lower-income people who were surveyed, it said.
"Gallup's Economic Confidence Index is the average of two components: how Americans view current economic conditions and their perception of whether the economy is getting better or worse," the poll report says. "In August, 20 percent said the economy is 'excellent' or 'good,' while 34 percent said it is poor. This resulted in a current conditions index score of -14, the same current conditions score found for five consecutive months." The outlook score was -18.
The range throughout the year has been -14 to -17. "The three-point range in monthly economic confidence this year does not appear to be the norm, given the wide month-to-month variations in previous years. In 2013, for example, the index rose to as high as -7 in May before falling to -35 in October — down 16 points from the previous month — during the partial government shutdown," Rebecca Riffkin wrote in the Gallup confidence report.
Meanwhile, according to Bloomberg, "Household purchases unexpectedly decreased 0.1 percent in July, the first drop in six months, after rising 0.4 percent the prior month, Commerce Department figures showed today in Washington. Incomes rose at the slowest pace of the year and savings climbed to the highest level since the end of 2012."
Gallup each month conducts tracking interviews with 15,000-plus American households, asking what they spent "yesterday" in stores, gas stations, restaurants and online. The pollsters do not count home and vehicle purchases and regular monthly bills. Each month of 2014, the average has been higher than for the same month in each year between 2009 and 2012.
"But spending is still below the $100 averages routinely seen in 2008 before the financial crisis occurred in the fall," Gallup's Justin McCarthy wrote. "In May of this year, spending nearly reached the $100 level, peaking at $98. After dropping to $91 in June, average spending recovered somewhat to $94 in July and was flat in August."
The Gallup report noted that "although higher-income earners may have spent less in August, middle- and lower-income-earning Americans picked up the slack — thus keeping overall spending flat."2 comments on this story
Consumer spending is considered key to continued economic recovery. Bloomberg reported spending accounts for 70 percent of the economy.
“This is not going to be a consumption-driven quarter,” Ian Shepherdson, chief economist at Pantheon Macroeconomics Inc. in White Plains, New York, told Bloomberg's Lorraine Woellert. “We need to see sustained faster payroll growth and wage growth.”
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