U.S. consumer spending, confidence decline
Last Updated: Tuesday, August 25, 2009 | 1:40 PM ET
CBC News
Americans are spending less and are more unsure of an economic recovery, two surveys released Tuesday suggest.
In one poll, Gallup Inc. said U.S. consumers chopped their average spending by more than 20 per cent for the week ended Aug. 23, versus the seven-day period finishing Aug. 9. — to $62 from $79 US.
Equally troublesome, Gallup noted that U.S. economic confidence also fell in the third week in August, with 36 per cent of respondents saying the economy was getting better. That result was four percentage points lower, compared with the Aug. 9 week.
The Princeton, N.J.-based polling firm said the two results could mean consumers are taking a breather from the spending high of the period Aug. 2-9, the 2009 peak for weekly expenditures.
U.S. consumer confidence and spending fell in Gallup surveys for the week ended Aug. 23. (Jim Ross/Canadian Press) "Gallup's spending data suggest that the surge in consumer spending to a new high for the year during the week ending Aug. 16 may end up being a sizable but brief blip, as opposed to an improvement in the trend. In turn, this suggests a disappointing back-to-school sales period for most retailers," said Dennis Jacobe, Gallup's chief economist.
Many experts have been debating whether the recent bottom reached by various U.S. economic indicators presaged a recovery or a mere flattening of the country's growth in gross domestic product.
The Gallup numbers indicate consumers were looking at the economy a bit bleaker as the back-to-school buying season gets into full swing.
By Aug. 11, only 42 per cent of Americans had made their school-related purchases, according to data from BIGresearch for the National Retail Federation, a leading retail trade group. That implies more than 50 per cent of consumers were looking at buy just as their economic sentiment was turning negative.
The National Retail Federation had already predicted that consumers would cut their back-to-school purchases by 7.7 per cent in the current year.
For these surveys, Gallup interviewed 1,000 people daily for the seven-day period. The surveys have a 95 per cent confidence limit, with a margin of error of three percentage points. plus or minus.
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