U.S. Consumers Maintained Their Modest Spending in June

U.S. Consumers Maintained Their Modest Spending in June
U.S. consumers reported spending $70 per day on average in June, essentially unchanged from $73 in May, and similar to June spending levels in each of the past two years.

These figures are based on Americans' self-reports of the total amount they spent "yesterday" in stores, gas stations, restaurants, or online -- not counting home and vehicle purchases, or normal monthly bills. Thus far in 2012, average daily spending has ranged from $63 (in January and February) to $74 (in March). This is in line with the "new normal" reduced spending in place since 2009, narrowly ranging from $58 to $76.

High-Income Americans Reined in Spending in June

Average daily spending among upper-income Americans -- those earning $90,000 or more annually -- fell to $116 in June from $136 in May. This mirrors a decline in upper-income Americans' confidence in the economy over the same period, with the Gallup Economic Confidence Index for this group dropping to -17 in June from -9 in May. Upper-income Americans' willingness to spend may have been hampered by the compounding effect of the stock market's uneven performance in June and a sharp decline in the market in May.

At the same time, overall spending remained fairly flat for the month due to stability in lower- and middle-income Americans' average daily spending, which was unchanged at $60, similar to where it has been for the past year.

Consumers in the East Also Pulled Back

Another reason consumer spending wasn't higher in June may involve restrained spending in the East. Residents there reported average daily spending of $59 last month, down from $68 in May and well below the region's $71 average for the first five months of the year. By contrast, June spending in the Midwest, South, and West was on par with average spending from January through May.

At the same time, June spending patterns by gender and age were entirely consistent with what Gallup typically records. Men's average daily spending continued to outpace women's by a hefty margin, likely reflecting men's higher average income. Adults aged 30 to 49 -- the age group with both the highest income and the greatest likelihood of having a child under 18 at home -- continued to outspend both younger and older Americans.

Bottom Line

At $70, Americans' average daily spending in June was consistent with recent monthly spending levels, and roughly matched June spending in 2010 and 2011. While this represents a more confident consumer than Gallup found in June 2009, when daily spending averaged $61, spending remains suppressed compared with the $104 average in June 2008.

Consumer spending might have increased in June if not for the pullback seen among upper-income Americans and residents of the East. Falling gas prices nationwide may also have played a role, particularly if Americans didn't use the money they saved on gas for other types of purchases.

The upcoming U.S. labor report, due out Friday morning, and subsequent stock market reaction to it could be critical in determining whether consumer spending in July gains new energy -- thus spurring economic growth -- or continues to stagnate.
From: http://www.gallup.com
Updated: July 6, 2012