“Overall self-reported daily consumer spending in stores, restaurants, gas stations, and online averaged $55 per day in the week ending Jan. 9 — down as expected from the $75 average for the month of December, but also well below the $68 average for the same week in 2010.”
They find no signs of a recovery in consumer spending in 2011:
“Throughout 2010, consumer spending remained relatively close to that of 2009 — the “new normal” trend. Spending surged in December of each year and then fell back in January as expected, given seasonal spending trends; Gallup’s spending data are not seasonally adjusted. Weather may be partly responsible for the sharper drop in early January 2011 — Gallup has found that it can affect weekly spending. Regardless, there are no signs that an improvement in consumer spending is taking place in early January 2011.”
Gallup says the “new normal” is likely to persist as unemployment remains high, deleveraging continues and the wealth imbalance in the USA persists:
“As consumers continue to deleverage — by not only paying down their debts, but also using less new credit — it may be that the “new normal” spending patterns of 2009-2010 will continue unabated in 2011. Lower- and middle-income consumers, who remain focused on using cash, may spend more on holidays and for special events, but then feel the need to pull back on spending shortly thereafter to compensate. Upper-income consumers, who have more disposable income to spend, might splurge at certain points during the year, but hold back on their spending more generally, as they did in 2009 and 2010.
Further, unemployment remains near double digits, and the broader underemployment figure stretches to include nearly one in five Americans. And, although the government’s economic data continue to show little inflation, oil prices exceeding $90 a barrel have pushed gas prices much higher than a year ago. Surging commodity and import prices are doing the same to food prices. A lack of job growth combined with higher food and gas prices may convince many Americans — particularly middle- and lower-income consumers — to hold back on their spending once again, as they have over the past couple of years.
On the other hand, the late December spending surge by upper-income consumers may reflect something of a return to so-called frugality fatigue. Bullishness on Wall Street and increasing upper-income American optimism about the economy might not send upscale spending back to the levels of 2007, or even 2008, but could break it out of the 2009-2010 spending new normal.
Whether the decline in spending during early January is an aberration driven by the weather and the aftermath of a late holiday spending surge or, instead, a return to the “new normal” is not clear. What is clear is that the direction of consumer spending during the weeks ahead will be key to the performance of the U.S. economy in early 2011.”
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