PRINCETON, NJ -- Overall self-reported daily U.S. consumer spending in stores, restaurants, gas stations, and online averaged $65 per day in September, down from $68 in August and from the 2011 high of $74 in July. After two months of declines, spending has now returned to March and April levels, which are some of the lowest of the year.
Upper-Income Spending Falls for Second Month
Spending among Americans making at least $90,000 annually averaged $108 per day in September, down from $119 in August and $128 in July. This is the lowest spending level among upper-income consumers since March of this year, and just above the 2011 low of $102 in January. Upper-income Americans spent less on average last month than the $118 they spent in September 2010.
Lower- and Middle-Income Americans' Spending Flat
Americans who make less than $90,000 per year reported spending an average of $59 per day during September -- the same as they spent in August, but down from $63 in July. Lower- and middle-income spending has been nearly flat since March.
Implications
Federal Reserve Board Chairman Ben Bernanke noted in his testimony before Congress on Tuesday that "Consumer behavior has both reflected and contributed to the slow pace of recovery." Â鶹´«Ã½AV Daily tracking results suggest that is indeed the case. The pullback in consumer spending over the past two months coincides with an economic slowdown and . In turn, the decline in consumer spending does not bode well for the U.S. economy or the nation's retailers during the important holiday season.
Â鶹´«Ã½AV analysis suggests there may be additional bad news for holiday sales, based on recent job market conditions. Â鶹´«Ã½AV's Job Creation Index fell . Consumer spending generally declines within four to six weeks of such a drop in job creation. The declines in spending during August and September followed a deterioration of job conditions during July and August. Therefore, September's further decline in job creation may imply a further decline in consumer spending during October.
In this regard, the job declines in the Midwest are particularly noteworthy. The early impact of a generally expected global economic slowdown may already be having an effect on job conditions in that part of the country. In turn, this deterioration of the jobs situation could lead consumers to cut back even more on spending.
Jobs tend to have relatively greater impact on lower- and middle-income consumer spending, while wealth effects such as those related to the declines on Wall Street and the continued drop in housing prices tend to have a greater impact on upper-income spending. Add in the , and the likely result is further spending declines among these Americans who have the most disposable income.
It may thus be a good thing that Bernanke also noted that the Fed is watching the current economic situation and is ready to act to promote economic growth if needed. With 8 in 10 Americans already , a further weakening of the economy as the holidays approach may well qualify for additional Fed action, whatever that might be.
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Survey Methods
For Â鶹´«Ã½AV Daily tracking, Â鶹´«Ã½AV interviews approximately 1,000 national adults, aged 18 and older, each day. The consumer spending results are based on a random sample of approximately 500 current full- and part-time employees each day.
National results for August are based on Â鶹´«Ã½AV Daily tracking interviews with 14,487 national adults conducted Sept. 1-30, 2011. For this sample, one can say with 95% confidence that the maximum margin of sampling error is ±1 percentage point.
Upper-income results are based on Â鶹´«Ã½AV Daily tracking interviews with 2,530 national adults conducted Sept. 1-30, 2011. For this sample, one can say with 95% confidence that the maximum margin of sampling error is ±3 percentage points.
Middle- and lower-income results are based on Â鶹´«Ã½AV Daily tracking interviews with 9,668 national adults conducted Sept. 1-30, 2011. For this sample, one can say with 95% confidence that the maximum margin of sampling error is ±1 percentage point.
Interviews are conducted with respondents on landline telephones and cellular phones, with interviews conducted in Spanish for respondents who are primarily Spanish-speaking. Each sample includes a minimum quota of 400 cell phone respondents and 600 landline respondents per 1,000 national adults, with additional minimum quotas among landline respondents by region. Landline telephone numbers are chosen at random among listed telephone numbers. Cell phone numbers are selected using random-digit-dial methods. Landline respondents are chosen at random within each household on the basis of which member had the most recent birthday.
Samples are weighted by gender, age, race, Hispanic ethnicity, education, region, adults in the household, and phone status (cell phone only/landline only/both, cell phone mostly, and having an unlisted landline number). Demographic weighting targets are based on the March 2010 Current Population Survey figures for the aged 18 and older non-institutionalized population living in U.S. telephone households. All reported margins of sampling error include the computed design effects for weighting and sample design.
In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
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