Upper-Income Americans Trimmed Daily Spending by 15% In June

July 9, 2012

gallup-self-reported-daily-spending-jan11-jun12-july2012.pngAverage daily spending in June declined among Americans who earn $90,000 or more, falling 15% to $116, from $136 in May, according to July 2012 figures from Gallup, which tracks spending on a monthly basis. This was the lowest self-reported spending level for upper-income Americans since September 2011 ($108).

By contrast, overall spending across middle- and lower-income level Americans remained fairly flat in June at $60 per day. The overall effect was that US consumers reported spending $70 per day on average in June, down from $73 in May, though similar to June spending levels in 2011 and 2010. These figures are based on Americans’ reports of the total amount they spent “yesterday” in stores, gas stations, restaurants, or online, excluding home and vehicle purchases and normal monthly bills.

Residents in the East Cut Spending 13%

Consumers in the East reported average daily spending of $59 in June, down from $68 in May, a reduction of 13% and significantly below the region’s $71 average from January through May. June spending remained level in the West when compared to the January-May period, while spending in the Midwest and South actually moderately increased.

Meanwhile, spending patterns by gender and age were consistent with observed trends. Men’s average daily spending continued to outpace women’s ($81 vs. $59), and adults aged 30 to 49 (who have the highest income and are most likely to have children under 18 at home) outspent both younger and older Americans, with daily spend of $80.

Spending Reflects The “New Normal”

Thus far in 2012, average daily spending across income levels has ranged from $63 in January and February to $74 in March. These figures are in line with the “new normal” reduced spending that began in 2009, and which ranges from between $58 and $76 daily. June’s $70 average is significantly higher than the $61 average for June 2009, but far below the $104 average for June 2008.

The Consumer Reports Index, the journal’s monthly measure of consumer confidence, reflected a similarly mixed bag for retail spending. After a 5-month slide, the index’s past 30-day retail measure jumped a full point from 8.9 to 9.9 for June, but was still below last year’s index of 10.2.

Consumer Confidence Rose 10.5% In Late June

The Consumer Reports Index takes into account employment, retail, sentiment, stress and trouble, and paints a rosy picture. Indeed, the index observed a sharp rise in consumer sentiment in late June to 53.1 versus 47.5 the previous month, a 10.5% boost. Confidence was up 5.5 points in households earning less than $50,000, and up 7.7 points among households earning $100,000 or more, in sharp contrast to Gallup’s findings on self-reported spending.

The Trouble Tracker, a gauge of financial difficulties in the past 30 days, dropped from 46.5 in late May to 41.8 in late June, indicating that while Americans may have trimmed spending, fewer are struggling. The index of planned purchasing for July is 8.6, up from the 7.0 consumers planned to spend in June, an 18.6% rise.

Gallup observes that upper-income Americans’ willingness to spend in June 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. Also true, lower gas prices in June may have given consumers more discretionary income, enabling lower- and middle-income consumers to maintain their levels of spending.

About The Data: Gallup.com compiled its index based on telephone interviews conducted as part of Gallup Daily tracking June 1-30, 2012, with a random sample of 14,687 adults, aged 18 and older, living in all 50 US states and the District of Columbia.

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