Tags: Gallup | Consumer | Spending | Economy

Gallup: Consumer Spending Average Matches Its March High of $89

Gallup: Consumer Spending Average Matches Its March High of $89

By    |   Monday, 04 April 2016 10:04 AM

Americans' daily self-reports of spending increased $5 to an average of $89 in March, up from $84 in February, Gallup reported.

The latest monthly average matches the highest spending for the month of March 2013 that Gallup has found in its nine-year trend of measuring U.S. discretionary spending.

March daily spending was only slightly lower in 2014 and 2015, when it averaged $87 and $86, respectively. Since 2008, averages for March have generally bested averages for January and February, and have usually increased again at some point in the spring — with the exception of 2012 and 2013.

The March 2016 average is based on interviews with more than 15,000 U.S. adults. Since January 2008, Gallup has asked Americans daily how much they spent "yesterday" in restaurants, gas stations, stores or online — not counting home, vehicle or other major purchases, or normal monthly bills — to provide an indication of Americans' discretionary spending.

"The increase in Americans' spending in March, compared with their spending in the colder months of January and February, is not unusual," Gallup reported. "Most years since 2008 have seen February-to-March spending increases — ranging from $11 in 2012 to $3 in 2011. And while the latest monthly average matches the record high for the month, it is fairly consistent with the $86 to $89 range for recent March average spending," Gallup explained.

"The latest average is significantly higher than the averages for March recorded from 2009 to 2012, as the economy struggled to emerge from the havoc of the financial crisis. And it represents a strong starting point for the spring and summer months when spending typically increases even further."

Officially, U.S. consumer spending barely rose in February and inflation retreated, Reuters reported.

A recent report from the Commerce Department also showed consumer spending in January was not as strong as previously reported. That, together with other data showing a widening in the goods trade deficit in February, indicated economic growth remained sluggish in the first quarter.

"It speaks to the weakening in domestic economic momentum at the start of this year, further reinforcing the Fed's cautious monetary policy bias," Millan Mulraine, deputy chief economist at TD Securities in New York, told Reuters.

Consumer spending edged up 0.1 percent as households cut back on goods purchases after a downwardly revised 0.1 percent gain in January. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, was previously reported to have increased 0.5 percent in January. When adjusted for inflation, consumer spending rose 0.2 percent. Inflation-adjusted consumer spending for January was revised down to show it unchanged rather than the 0.4 percent rise that was previously reported.

Given labor market strength and cheap gasoline, economists speculated that consumption had been hampered by a massive stock market sell-off at the start of the year which eroded consumer confidence.

Incomes have been rising faster, but Americans seem to be saving rather than spending, The Wall Street Journal explained. The personal-saving rate hit 5.4% last month, matching its highest level since the end of 2012.

“The equity markets were pretty volatile and the upper-income brackets started doing not so much spending, and even the middle class most likely said, ‘Let’s take it a bit easy, let’s put a bit more aside,’” Chris Christopher, director of consumer economics at IHS Global Insight, told WSJ.com.

(Newsmax wire services contributed to this report).

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Americans' daily self-reports of spending increased to an average of $89 in March, up from $84 in February, Gallup reported.
Gallup, Consumer, Spending, Economy
Monday, 04 April 2016 10:04 AM
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