Americans' daily self-reports of spending fell to an average of $88 in January, down from $105 in December. This is consistent with the drops in January over the previous four years. However, it is the highest daily consumer spending average for the month of January since 2008, when the average was $97. Later that same year, consumer spending began to drop, as the U.S. economy faltered during the Great Recession. In January 2011, the average reached a low point of $58. Since 2013, Americans' self-reports of spending have stayed in the $78 to $88 range in January.
While December is often the highest month for consumer spending -- and December 2016 was the highest December in nine years -- January is often the lowest. The drop of $17 this year in Americans' self-reported spending from December to January is consistent with the declines in spending between the two months in each of the past four years. Among income groups, spending in January dropped not only among people making at least $90,000 annually but also among those making less than that. The same happened one year ago at this time.
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.
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.