US: Gallup US Consumer Spending Measure

Mon Mar 02 07:30:00 CST 2015

Actual Previous
level $82 $81

Americans' daily self-reports of spending averaged $82 in February, similar to the $81 in January, but slightly lower than the February average from last year. The daily spending average fell $17 between December and January -- a sharp drop, but one that is typical after the holiday shopping season. Spending has generally been level between January and February since polling began in 2008. Two years, 2008 and 2014, saw significant February increases. But the changes have not been statistically significant in all other years.

Average self-reports of spending were essentially steady in February among upper- and middle-/lower-income Americans. Spending among middle- and lower-income Americans -- all those whose annual household income is less than $90,000 a year -- averaged $71 in February, level with January. Spending among upper-income Americans averaged $137, also unchanged from January. Middle- and lower-income Americans make up the bulk of U.S. consumers, and their spending is typically more stable month-to-month and lower than what is seen among upper-income Americans. At $71, spending among middle-/lower-income Americans was down last month compared with February 2014, when it averaged $79 -- largely explaining the year-over-year drop in overall spending. Gallup saw no meaningful change in upper-income Americans' spending from year to year.

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.