U.S. consumers' average daily spending in December was $98, matching the upper reaches on this measure since 2008. While strong relative to the recent recessionary period, it is similar to the $95 found in November, as well as the $96 in December 2013. This indicates that even though spending is stronger than in the past, some U.S. consumers are still cautious amid positive economic news and growing consumer confidence.
Because of holiday shopping, December spending has usually been the highest of any month in Gallup's seven-year history of asking this question. That was not the case in 2014, given that December's $98 average matched the $98 from May, and was barely higher than November's average. The lack of a more significant November-to-December increase, common in prior years, could be a sign that the Christmas retail season was less than robust. However, December spending was up $9 from October, which is more typical of the past pattern, so perhaps holiday shoppers began their shopping earlier.
Upper-income Americans, those whose household incomes are $90,000 or more a year, had daily spending reports averaging $177 in December, among the highest for this group in 2014, and over the years since the recession. The December average is similar to last December's level. Upper-income spending has shown steady gains since September. Spending among middle- and lower-income Americans, those whose annual household incomes are less than $90,000, was also higher than that found in most other monthly readings Gallup has conducted in the past several years. However, their spending levels in December 2014 roughly matched those in December 2013. Although spending among upper-income Americans often drives the changes in Gallup's monthly estimate, middle- and lower-income Americans make up the bulk of U.S. consumers.
Self-reported consumer spending is a new behavioral economics measure based on the individual reports of a random sample of Americans. The focus is on consumer discretionary spending, including on basics such as gas purchases at the pump and more optional impulse purchases online or in stores. Excluded are routine spending, including the consumer's monthly bills, and big purchase items such as automobiles and housing.
By tracking consumers' reports of how much they spend on a daily basis, investors can monitor not only overall discretionary spending trends, but also the impact on Americans' spending patterns of everything from the day of the week to special events.
Gallup's self-reported Consumer Spending measure is a real-time indicator of Americans' discretionary spending. The behavioral characteristics of this new measure provide early and unique insights into how consumer spending is responding to various changes in the business environment.
Further, the spending measure provides estimates on a continuing basis, giving an early read on what the government eventually reports for retail sales roughly two weeks after the close of each month. Overall, Gallup's behavioral-based spending measure allows business and investment decisions to be based on essentially real-time consumer spending information.
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