In August, Americans' self-reported daily spending averaged $89, similar to the $90 to $91 averages Gallup has found each month since April. The latest figure is the lowest August reading since 2012. Spending peaked at $114 in May 2008 before waning and then plunging amid the global economic crisis that took hold later in the year. From 2009 to 2012, spending stagnated, ranging between $58 and $83. Americans' spending picked up in late 2012, and continued in 2013 and 2014, ranging from $78 to $98. Averages for 2015 have ranged from $81 to $91.
If monthly spending patterns in recent years are any indication of what is to come, spending is not likely to increase in September. In each of the previous five years, spending in September has been lower than in August, including sharp declines of $11 in 2013 and $7 in 2014. In 2008 and 2009, it increased slightly, but only by a dollar or two. Regular declines in spending from August to September are understandable given the end of the vacation season and the end of back-to-school shopping, one of the busiest times of the year for retailers. A later Labor Day holiday could extend the typical summer vacation and back-to-school shopping seasons, with some of that usual August spending being shifted to September this year. By contrast, spending typically booms at the end of the year. In each year except for 2008, spending averages increased -- often by double digits -- between September and December.
Though down slightly, Americans' spending remains in somewhat of a holding pattern, having stayed within a $2 range for the last five months. But while the average for August is on par with recent months, it remains below averages recorded for August in 2013 and 2014.
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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