Following a drop to $84 in September, consumer spending has risen steadily to a five-year high of $96 a day in December. The last time consumer spending reached this level was September 2008.
Gallup has collected the data since January 2008 and is based on a survey of U.S. consumers who are asked how much they spent on the previous day, not including normal household bills and major purchases like cars and appliances. The results are a reasonable indicator of discretionary spending, according to Gallup.
Since the survey’s inception, the highest level of spending was reported in May of 2008 at $114 a day, and the lowest was $58 a day in January 2011. December is typically high because of holiday spending during the month.
Because consumer spending drives about two-thirds of the U.S. economy, a rise in discretionary spending to more than $100 a day would signal that Americans are returning to pre-recessionary levels of spending.
Possible headwinds remain however. The debate over the U.S. debt limit has not gotten started yet and could lead to the threats we have seen before to default on the U.S. debt. Americans’ outlook for the U.S. economy is weakening instead of strengthening. Job creation continues to rise slowly, but wages are essentially stagnant. It will not take much to convince U.S. consumers to keep their wallets closed.
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