The daily self-reported spending for consumers averaged $90 in June, unchanged from May and only a tick higher than March's $89. Unlike economic confidence, which has continued to edge higher since March, consumer spending essentially has remained flat, according to the results of Gallup Daily tracking interviews.
Gallup's measure of Americans' spending has not weakened despite many economists expecting spending to fall after federal lawmakers did not renew the payroll tax cut and let the sequester go into effect. This leveling in spending may be a result of gains on Wall Street during the first half of the year and may also point to increased optimism about housing prices and the refinance benefits record-low mortgage rates have provided.
The lack of higher consumer spending is a bit disappointing given Americans' relatively high level of economic confidence in May and June. However, it is hard for spending to rise without real job growth. And, as this disconnect illustrates, economic confidence is often a necessary but not sufficient reason for consumer spending to increase.
Longer term, Americans' self-reported spending is stronger than it was from late 2008 to late 2011, but continues to trail behind early 2008 spending, before the recession gained strength.
Gallup's consumer spending measure is a discretionary spending measure and is more closely related to chain-store sales and online sales than overall retail sales. Self-reported spending results are not seasonally adjusted. The June results are based on Gallup Daily tracking interviews, conducted by landline and cellphone, with more than 13,000 Americans from June 1-27.
Based on the poll results, it appears that neither the payroll tax nor the sequester has had a negative impact on lower- and middle-income spending as might have been expected. Nor have the gains on Wall Street and in housing values had a disproportionately positive effect on upper-income spending.
Upper-income spending averaged $143 in June, not much different from the $150 in May and about the same as April's $140. Lower- and middle-income daily spending averaged $76 in June, not much different from the $77 per day in May and March's $75.
The lack of change in Gallup's self-reported consumer spending for June is consistent with the economy's modest growth during the second quarter following what was a surprisingly weak first quarter.