Gallup Slams Lid On Hopes for US Economy

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Wolf Richter   www.wolfstreet.com   www.amazon.com/author/wolfrichter

Consumers are “straining against rising prices on daily essentials to afford summer travel, dining out, and discretionary household purchases – the kinds of purchases that ordinarily keep an economy humming.” That’s what Gallup found when it used a new survey to dive deeper into consumer spending.

Its regular monthly survey has been mixed. The average dollar amount consumers spent in June swooned to $91 per day from $98 in May, after a crummy January-April period ranging from $78 to $88 per day. The May spurt seems to have been an outlier that had given rise to a lot of speculation consumers would finally hit “escape velocity,” now obviated by events. But from 2012 until late last year, the averages had been rising.

So Gallup dove deeper into the issue with its new survey conducted in mid-June to sort through what consumers are spending more or less money on. And what it found was that they’re buying a little more – “just not the things they want.”

They’re spending more on things they have to buy, and in many instances they’re spending more in these categories because prices have jumped. At the top of the list: groceries.

  • Groceries: 59% spent more, 10% spent less.
  • Gasoline: 58% spent more, 12% spent less
  • Utilities: 45% spent more, 10% spent less
  • Healthcare: 42% spent, 8% spent less
  • Toilet paper and other household goods: 32% spent more, 5% spent less
  • Rent, the biggie: 32% spent more, 9% spent less.

These categories are household essentials. They’re on top of the priority list. And in order to meet the requirements of these items, consumers are cutting back where they can. Gallup found that “the increasing cost of essential items is further constraining family budgets already hit hard by the Great Recession and still reeling from a stagnant economy.” Hence, the less essential the expense, the more it got cut. Here is the bottom of the list, which explains part of the recent retail woes:

  • Retirement savings: 18% spent more, 17% spent less.
  • Leisure activities: 28% spent more, 31% spent less
  • Clothing: 25% spent more, 30% spent less
  • Consumer electronics: 20% spent more, 31% spent less
  • Travel: 26% spent more, 38% spent less
  • Dining out: 26% spent more, 38% spent less

Then there are summer travel plans, so future spending. They show just how bifurcated the economy has become. On the positive side of the ledger, 69% of American plan to travel this summer, the highest since 2006, and far more than the 52% in 2009 during the depth of the Great Recession. And those travelers intend to spend more on transportation, food, lodging, and entertainment than last year, as Gallup put it, “further pressuring their already-strained budgets.”

But about one-third plan to spend only one night or less away from home. So not exactly a long vacation. And 36% are planning to travel less than last year, even worse than in the terrible year of 2010, when 33% were cutting back from the already terrible year 2009.

And what about “escape velocity” in consumer spending? Despite what Wall Street economists and other hype mongers have been predicting for five years in a row, Gallop soberly puts slams the lid on those speculations:

If there was any doubt that the U.S. economy is still struggling to get back on its feet, the results of this poll reinforce that reality. Because consumer spending is the lifeblood of a healthy economy, these findings suggest that discretionary spending still has a ways to go before it will fuel the kind of economic growth Americans have been hoping for.

Americans who are struggling to make ends meet, and who cut discretionary spending in order to pay for essentials, form a large part of the middle class. But there are others who don’t have these problems, who are doing well. A dichotomy that shows up in “dining out.”

“Dining out” made the bottom of the list: 38% of the people cut back, while only 26% spent more on it. The restaurant industry should be groaning in pain.

But someone must be eating out. The Restaurant Performance Index (RPI) for May, released on June 30, rose again, “driven by stronger sales and traffic levels and an increasingly optimistic outlook among restaurant operators.” May was the third month in a row that the Current Situation Index was above 100, and therefore in expansion mode.

Smell of conundrum? Nope. But a sign of America’s dual-track society. The 26% of consumer who spent more on dining out might well belong to that group whose median household income exceeds $50k a year. They feel flush and their confidence has soared to post-recession highs. But the confidence of consumers making less than $50k a year has barely moved up from the recession bottom. And the gap between the two is at a record high. Read….  This Chart Truly Depicts What’s Wrong With the ‘Recovery’ in America

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Mon, 07/14/2014 - 23:11 | 4957912 Saltaire
Saltaire's picture

Whatever it is IT"S NOT WORKING now is it? I have to believe somebody better let go of what belongs to the rest of us and soon before it's too late. You say it's already too late. Now what? Those that have taken our wealth have fled the country for tax havens. You mean all that money we borrowed to bail ourselves out is gone, it went with those who have jumped ship. How could this be, you mean Detroit was the canary and is just the tip of the iceberg. I'm afraid so, you're not going to like what comes next I'm sorry to tell you.

Mon, 07/14/2014 - 00:11 | 4954515 are we there yet
are we there yet's picture

$32,000 a year exceeds nearly all retirees social security. With our new health care, it sounds like grandpaws future is as a pothead. I read that Obama used to deal and smoke pot in college.

Sun, 07/13/2014 - 22:28 | 4954240 Dragon HAwk
Dragon HAwk's picture

So there is No Inflation, but Americans are spending more on the things they Need  ....  Got It..

Sun, 07/13/2014 - 21:40 | 4954095 kurt
kurt's picture

Look at my pole!

Sun, 07/13/2014 - 13:48 | 4952776 AdvancingTime
AdvancingTime's picture

It is hard to be optimistic about Washington when the President thinks it will cost 3.7 billion dollars to handle 52,000 children that have flooded to our southern border from countries like Guatemala, Honduras and El Salvador.

When doing the math this amounts to over $71,000 each. An American who has worked all their life and now lives on a monthly social security check of around  $1,000 a month the cost will most likely seem excessive. More on this subject in the article below.

 http://brucewilds.blogspot.com/2014/07/children-at-our-border-72000-each...

Sun, 07/13/2014 - 13:22 | 4952685 TVP
TVP's picture

PROOF-READ YOUR SHIT, RICHTER!!!!

 

One or two typos can be understandable.  One or two every other paragraph is just plain sloppy.  

Sun, 07/13/2014 - 12:25 | 4952461 Jano
Jano's picture

If the people have enough money to play in the stock casino, then I could not care less about their spending.

Sat, 07/12/2014 - 20:57 | 4951211 Magooo
Magooo's picture

HIGH PRICED OIL DESTROYS GROWTH

According to the OECD Economics Department and the International Monetary Fund Research Department, a sustained $10 per barrel increase in oil prices from $25 to $35 would result in the OECD as a whole losing 0.4% of GDP in the first and second years of higher prices.  http://www.iea.org/textbase/npsum/high_oil04sum.pdf

 

THE PERFECT STORM (see p. 59 onwards)

The economy is a surplus energy equation, not a monetary one, and growth in output (and in the global population) since the Industrial Revolution has resulted from the harnessing of ever-greater quantities of energy. But the critical relationship between energy production and the energy cost of extraction is now deteriorating so rapidly that the economy as we have known it for more than two centuries is beginning to unravel. http://ftalphaville.ft.com/files/2013/01/Perfect-Storm-LR.pdf

 

 

The only thing between a deflationary death spiral and us is trillions of stimulus - which can temporarily offset the end of growth due to the high price of oil

Sat, 07/12/2014 - 19:11 | 4950989 AdvancingTime
AdvancingTime's picture

 A big shift is occurring in what consumers are buying. Recently we are witnessing a shift from general consumer goods to more purchases of autos and healthcare. The first quarter GDP just came out down 1% yet these two sectors have been outperforming the economy. 

If indeed online and auto sales are roaring up double digits at the same time healthcare spending has increased 4.2% it is only fair to assume small business and someone else is getting their ass kicked. Interestingly, this is all occurring as the government continues to pour out billions of dollars each month in student loans, many of these loans will never be repaid. This can be viewed as more proof we are on the wrong path, more on this subject in the article below.

 http://brucewilds.blogspot.com/2014/05/consumption-of-autos-healthcare-a...

 

Sat, 07/12/2014 - 16:56 | 4950691 drendebe10
drendebe10's picture

Let's see here... impose higher taxes, make the serfs & peasants pay higher premiums with obscene deductibles for crappier health insurance, incite stealth infation by printing greenbacks, have ur state media paint a oollyanna licture and have ur govt bureaucrats and prigressive liberal democrao minions spew lie after lie after lie to divide the nation deeper than since the Civil war. Job well done, liar in chief... go play 18 holes @ the serfs & peasants expense and don't forget it's okay for u to cheat on you scorecard as well. Ain't America grand!

Sat, 07/12/2014 - 16:18 | 4950617 foxmuldar
foxmuldar's picture

Eat lots of corn. Corn crops are expected to hit record highs this year due to ample rainfull in the corn belt. This could also be a reason we haven't seen gas prices soaring following the middle east conflict. 

Sat, 07/12/2014 - 15:49 | 4950544 ThankYouSirMayI...
ThankYouSirMayIHaveAnother's picture

But, But the yearly deficit dropped by 35 billion--- the recovery has surely got to be just around the corner; oh wait sorry the 'just around the corner' turned out to be a 'reach around'.....if you make believe hard enough it kinda feels good ;)

Sun, 07/13/2014 - 07:35 | 4951850 QEternity
QEternity's picture

It never helps when the piper to pay is a loan shark

Sat, 07/12/2014 - 16:43 | 4950661 Fresh
Fresh's picture

lol

Sat, 07/12/2014 - 15:15 | 4950429 james raider
james raider's picture

Three part-time jobs to survive, does NOT a successful society make.

Sat, 07/12/2014 - 12:18 | 4949915 q99x2
q99x2's picture

I liked the article Wolf. I'm spending the summer in Pittsburgh and what I've noticed is that the groceries here have increased to a comparable price as they are in LA. California. The gasoline prices for the first time are also equivalent.

Things are getting messy.

Sat, 07/12/2014 - 12:24 | 4949930 the grateful un...
the grateful unemployed's picture

socal is pulling food out of mexico. we would have a lot higher prices if it werent for the cross border agriculture trade

Sat, 07/12/2014 - 11:32 | 4949839 the grateful un...
the grateful unemployed's picture

a number of these habits are just ways we have of fooling ourselves. if we decide to cook at home, and not eat out, we are forced to accept what a large amount of waster we generate in preparing meals. if we go out to eat we dont' see that waste. and we hate leftovers, but we gladly schlep home a styrofoam container with half our restaurant meals (because portions are too big) when you travel did you ever think, for all these people this is their environment, they work here pay bills here. suddenly hawaii doesn't seem so exotic if you imagine that your bring the same set of everyday concerns along with you. does diamondhead look as good after youve pulled a double shift at the pineapple factory? most of these things are devices to fool ourselves, an iphone is the biggest joke, why not just go talk to the person, that's what people used to do. every few decades the public attitude swings back to a more normal (and cynical) attitude. why do i spend all this money on soft drinks, they're just sugar and water. we need our illusions, we can imagine making it with one of those magazine models, but we're going to get a lot more love right here at home from our spouses. eventually the illusions pile on top of illusions and finally everyone says enough.

Sat, 07/12/2014 - 16:16 | 4950608 kumquatsunite
kumquatsunite's picture

Ain't no waste at my house; we eat what we cook and we cook what we eat. If you are generating a lot of waste in preparing meals, you don't know what you are doing and should hire someone to teach you. As to hating leftovers, what a soft-bellied society we've become. If you'd a told my dad you hated leftovers, he'd got out his belt and taught you what leftover means and then you'd go to bed without dinner.

Another thing, I hate eating out...all those tattoos on their arms and necks I find revolting and don't want to look at them and then eat. And, if they have tattoos it's an indicator to me they are stupid so I assume they are doing things in their private life that may be under their fingernails, disgusting things I don't want to have neat my food.

Lastly, my brother worked in the pineapple factory, and it's long gone from Hawaii. 

And (dear zerohedge) there shouldn't be even ONE illegal in this country when we don't have jobs for our own. It should be go work the fields and pick crops rather than get food stamps from the gov. After a few hous picking strawberries (as my sister did for three summers) spending money for sugar water in a can ain't so appealing.

PS. Had a few chicken nuggets recently that a friend has just bought. They were the most disgusting thing I've ever seen. Pulverized, processed, pukey, pitiful things masquerading as food. No wonder out kids are having learning problems. They are being starved on fast food.

Sat, 07/12/2014 - 16:26 | 4950630 foxmuldar
foxmuldar's picture

I fully agree, we don't need anymore Illegals here. If they wanted to pick tomatoes or harvest fruit, thats ok, but today their taking the construction and landscaping jobs that Americans would be happy to have. Food stamp numbers continue to rise because Illegals are pointed in the direction of the welfare office soon as they get here. And with the new flood of them coming, its only going to get worse. 

Sat, 07/12/2014 - 08:58 | 4949655 sandblaster
sandblaster's picture

Another old Chinese proverb, "Man who have hole in pocket feel cocky all day."

Sat, 07/12/2014 - 05:42 | 4949557 NOZZLE
NOZZLE's picture

$50k a year plus makes you feel flush, so flush you rush to a restaurant? I make more than that but I can count on two hands the number of times I go to a restaurant per year. Are they including McShitz or StitzPotle in their dining out count?

Sat, 07/12/2014 - 10:13 | 4949730 edifice
edifice's picture

Exactly. In CO, $50k is, basically, a hand-to-mouth existence. They are probably including everything eaten outside the home as a "restaurant".

Sat, 07/12/2014 - 07:22 | 4949590 doctor10
doctor10's picture

The Fed and US Govmt have been desperate to jump start "inflation" as that is the only means by which they can ever get around their pile of debt.

The reality is they are sucking the life out of disposable income which is 70% of the economy

Sat, 07/12/2014 - 13:04 | 4950022 zipit
zipit's picture

Bticoin, bitchez.

Sat, 07/12/2014 - 23:12 | 4951479 bitterwolf
bitterwolf's picture

The new economy:

Internet 2.0 dot com startups(Rap genius raises 40 million) straight outa the first dot bomb micky mouse shit, for the employed uppermiddle class and better 401k investor

WEED economy for everybody else- CO., WA. and soon in your state.

The official taxable yet still underground(unbankable enterprise) economy.

Thats the FED having their cake and eating it too

ohhh almost left out the millions of no skill hispanic/insta-citizens to help top up the national ponzi  Social Security trus-us- the- check,sin -the-mail fund.w Whoooee, just in the nick of time.

 

 

Sat, 07/12/2014 - 08:14 | 4949617 DavidC
DavidC's picture

The Fed and the Government comprise clueless fuckwits.

DavidC

Sat, 07/12/2014 - 10:12 | 4949728 rccalhoun
rccalhoun's picture

cruise ship fares are a pretty good indicator of health of the middle class and those fares are low and have been for 5 years

Sat, 07/12/2014 - 13:05 | 4950024 zipit
zipit's picture

"Upper Lower class" FIFY

Sat, 07/12/2014 - 05:21 | 4949549 kareninca
kareninca's picture

Some things are going down in price, as you would expect.  Those "in between" things, that you don't absolutely have to buy, but are not luxuries; there is a huge amount of competition and pricing pressure out there in the attempt to get middle class dollars.  Dog poop bags on Amazon, a year's supply, have gone from $18 to $16.  Curcumin has gone from $22 to $18 for a reputable brand.

I saw a first today in Palo Alto, CA; a first for me anyway.  Near the Wells Fargo machine on El Camino, a South American woman who was holding a toddler was begging.  She had a sign that had clearly been made for someone else (it was in English and was an old sign re losing one's job).  I guess that she has to pay off the coyote who got her here.  What I didn't get was that she was wearing attractive sandals; good lord if you are going to stand holding a toddler then sneakers are a better bet.  It was pretty depressing.

Sat, 07/12/2014 - 16:33 | 4950641 kumquatsunite
kumquatsunite's picture

No that's not depressing. What's depressing is that California has become a cesspool of Mexicans. And no that's not racist. Every group on the planet has their own country. No one is expected, due to political correctness, to cede their country. China is for the Chinse. Mexico for the Mexicans. 

We long ago passed the point where we need anymore immigrants of any kind, legal or illegal. Houston is recycling pee water to serve up to households as drinking water, which is all well and good until you have some guy hung over or who can't read the English (cause in Houston he probably is a mexican, and that's not racist either, check the demographics of Houston) and who cuts the filter by half. Had a friend once who "pushed the wrong button at a nuclear facility...it was, of course, an "accident:) They are trying to put this in place all across Texas and are talking about it for California where there are now 50 MILLION people including 10 million illegals. 

The ONLY Rule of Govt now is lie to the people until it's a fait accompli and then it's "too bad so sad." The dumb beast called Oboma knows this as his "golden rule."

And yes, Oboma is dumb. He learned things as a kid about communism and inequality that he ha never questioned or challenged. He is invested in his own self-destruction, and the destruction of this country. So for future reference, 1. NEVER elect a foreigner as president, and being a foreigners means that you have significant cultural ties to another country. Oboma lived outside the US during important formative years and has no allegiance to the US; as a communist he is simply doing what communists do; raping and pillaging what has been created without regard for the future. 2. Never elect a president who has to keep saying "these are good people" and "they only want...". These are backass ways of saying screw you to white people and all Americans who've been here longer than ten minutes. 3. Never elect a president who is a sissy. Oboma is a soft-spined, lilly-livered, flim flam man with a communist double-ganger in valerie jarett. Oboma would sell his own children into slavery to the Chinese if he could be dictator of America...well, I was going to finish that sentence but then I realized Oboma knows al too well that he IS the dictator of America and he has his thumb on his nose and is going, "na noo na noo, what cha gonna do bout it?"

Oboma has seen that he can do whatever he wants and for the next two years he'll do exactly what he wants. Too bad he is just a dumb beast that had a legal education wasted on him. Notice he knows nothing about anything? No literature (speech writers might try and insert something to make him look smarter), no philosophy, no history, no art, nothing that a good college education actually teaches. He was too busy chooming to learn. A dumb beast, rutting about, tearing down because a dumb beast is too dumb to know how to build. Building is hard work, ask any farmer or carpenter or seamstress. To build, you have to believe in the future. Oboma believes in nothing.

Sun, 07/13/2014 - 02:31 | 4951669 SFopolis
SFopolis's picture

I have a couple of comments for you.

The first is in agreement to your immigration stance.  I've lived (as an Illegal) in foreign countries before.  I earned money, had bank accounts and fully expected to be kicked out of the country at any moment.  It never dawned on me that I would have some sort of argument to be able to stay there.  But for the happenstance of birth, I did not live in those countries.  Thems the breaks.  I understood what I was getting into when I went there.  I cannot blame anyone for trying to get here and make a better life.  I'd do the same thing.  But.... It is against our laws and that is that.  

The second has been brewing in me for years of reading ZH.  I see it worse and worse by the day.  Oboma, Communist, Dumb beast.  Study yourself what communism is.  What socialism is.  What our country is and has been from the get go.  The very idea of government is socialist.  If you drive on our roads it is socialist.  What you call communism is mostly Fascism.... and there are some aspects of that going on these days with the NSA and the allowance of Corporate interests dictating government....these things are very real.  But get your terms right.  

And... I think Obama is a poor president for his lack of strong leadership and his utter failure to prosecute the financial industry and his allowance of the surveliance state to continue.  My opinion:  Since WW2 the good presidents were Ike, JFK, Nixon and Carter (poor leader, though).  The worst is without doubt W.  He did not single handidly destroy our country, but he drove the nail.  Obama is a mitigated icing on the cake.

Sat, 07/12/2014 - 17:34 | 4950776 Kassandra
Kassandra's picture

The Mexicans have taken back what was theirs to begin with...
without firing a shot.

Sun, 07/13/2014 - 09:34 | 4951958 cherokeepilot
cherokeepilot's picture

I like your line of thought and in that perception, can I have my land back?  I have a Cherokee heritage and my great-grandfather would like the land stolen from him returned.  In reality that won't happen because as a good friend once told me "get over it, you guys lost the war."  Maybe if we told the illegals that, they would just go home.  Yah, right.

Sat, 07/12/2014 - 23:52 | 4951545 bitterwolf
bitterwolf's picture

No shots yet...take a close look at serbian ethnic cleansing...it can happen here.white hate militia supported by a resentful silent white middle class pussy pc populace to scared and weak to act themselves but tacitcly complicit by aiding and abetting in money and shelter from law enforcement. Bundy ranch on steroids.

Goddam white folk are crazy

Sun, 07/13/2014 - 09:25 | 4951951 Zadok
Zadok's picture

Whiskey Tango Foxtrot...?

Sat, 07/12/2014 - 18:13 | 4950845 kareninca
kareninca's picture

The people who were in the Palo Alto, CA area before the white people came, were Ohlone Indians, not Mexicans.

The Ohlones were here for a very long time, before the white people came and wiped them out.  You can find their artifacts all over the place around here; they fall out of the edges of creek beds.  They were a very interesting culture.  It is said that they had no word for famine, because they did not experience it in this generous area.  They lived mainly on seafood and on acorns.  A family would stake out a particular oak tree and it would be "theirs" for years.  There is real variation among acorns; I've tried them around here; some are nasty and tannic and some are sweet and nutty and tasty.

Sun, 07/13/2014 - 01:21 | 4951646 tvdog
tvdog's picture

Acorns were eaten by the ancient Greeks also, though they were considered food for the poor. Acorns are edible if you soak them for a while first to remove the tannins.

Sun, 07/13/2014 - 15:27 | 4953063 kareninca
kareninca's picture

Yes, I've done that.  It takes a lot of grinding and soaking!  It's easier to start with better acorns.

I didn't know that re the ancient Greeks, thanks.

Sat, 07/12/2014 - 16:48 | 4950668 drendebe10
drendebe10's picture

"...navy corpse-man..."   ..."57 states..."

The corrupt, incompetent arrogant narcissistic illegal indonesian kenyan alien muslim sociopathic liar in chief only cars about its celebrity grand imperial golf life style on the backs of hard working tax paying US citizen serfs and peasants. 

Sat, 07/12/2014 - 14:11 | 4950212 EBT excepted
EBT excepted's picture

most beggars are already in your pocket, if you pay taxes...

Sat, 07/12/2014 - 14:01 | 4950185 get-sum
get-sum's picture

someone should let her know that on-line doggie porn pays better...

Sat, 07/12/2014 - 05:22 | 4949513 litemine
litemine's picture

This is a link to what Happened in 2008 and the attempts to correct it, talk from a Banker and others?  who caused it and their Pay Grade....and where they are Now............Bound to become a Classic.                          " Bring out the Rope."

 http://www.aljazeera.com/programmes/headtohead/2013/06/201361294652861958.html

Yes it is Aljazeera...........University of Oxford......."UK"...................Can the truth hurt?

 

Fri, 07/11/2014 - 22:42 | 4949181 therevolutionwas
therevolutionwas's picture

And if you take out the Chinese we have no economy.

Sun, 07/13/2014 - 08:53 | 4951912 Took Red Pill
Took Red Pill's picture

but I like Chinese take out!

Fri, 07/11/2014 - 21:12 | 4948982 TeethVillage88s
TeethVillage88s's picture

Elizabeth Warren says the big 5 increases in 2007 were:

A) Mortgages
B) Cars ((more than 2 per household)
C) Health Costs (Health Insurance)
D) Child Care (since 2 parents work now)
E) Taxes (this was before the 2008 collapse & ACA)

This was a study that she mentioned in a Video about Collapse of the USA. Sorry I don't have the actual Date of Video.

She probably did a far job on it.

Sat, 07/12/2014 - 08:27 | 4949625 wonderatitall
wonderatitall's picture

she forgot  injuns 

Fri, 07/11/2014 - 22:49 | 4949198 ClowardPiven2016
ClowardPiven2016's picture

Elizabeth Warren is clueless 

Sat, 07/12/2014 - 02:30 | 4949422 August
August's picture

Faux-cahontas Warren belongs to that surprisingly large number of people who can run around shouting "It's the bankers!  We're all being fucked by the bankers!", and then propose more government intervention and regulatory authority to put an end to the fucking.  Must be a Noam Chomsky enthusiast.

Sat, 07/12/2014 - 15:51 | 4950553 Vendetta
Vendetta's picture

"propose more government intervention and regulatory authority to put an end to the fucking"

Regulation for bankers? Like?

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