Consumer spending remained in deep trouble in October.
“Americans’ self-reported spending in stores, restaurants, gas stations, and online averaged $62 per day during the first four weeks of October. That figure is up from $59 in September and is about the same as the $63 figure from August. From a broader perspective, spending remains in the 2009-2010 new normal monthly average range of $59 to $72 and is far below the 2008 recessionary spending range of $81 to $114.”
The figure casts doubt on data that shows holiday spending will rise sharply enough from last year for retailers to add large numbers of employees and build up inventories. The industry did both of these things in 2008 and ended up with large amounts of unsold goods as the year turned to 2009. The problems resulted in thousands of retail store closings and tens of thousands of layoffs.
The environment for retail sales has changed in the last two or three months. Reports from large retail companies show a slight improvement in same-store sales, but unemployment has not improved and third quarter GDP was up an anemic 2%. There is no reason to believe that figure will improve in the current quarter.
It will be a long, hard winter for the retail industry.
Methodology: Results are based on telephone interviews conducted as part of Gallup Daily tracking with a random sample of 1,000 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia, selected using random-digit-dial sampling.
For results based on the weekly sample of national adults averaging 3,500 interviews, one can say with 95% confidence that the maximum margin of sampling error is ±2 percentage points.
Douglas A. McIntyre