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US Consumer Spending Declines For Third Consecutive Month, Down 5 Of Past 7 Months
There is (double) seasonally-adjusted, goal-seeked and revised (since 1976) consumer spending data as reported by the government and meant to validate administration policies, and then there is Gallup's polling of 15,217 US adults who are asked to self-report on their daily spending patterns.
For those who prefer unbiased, accurately reported data, it should come as no surprise to those who have been observing the recent swoon in the economy, that according to Gallup data, July was the third month in a row in which the average American spent less than they did in the same month a year ago, confirming that the US economy is if not in a recession then certainly no longer growing.
Furthermore, as the chart below shows and confirms the already week retail spending data, of the 7 months in 2015, 5 have seen a decline in consumer spending year over year.
The July Y/Y decline of $3, was also the largest decline for the mid-summer month since 2008. Also, the $91 July self-reported daily spend was $13, or more than 10%, lower compared to what Gallup survey respondents said they spent just before the financial crisis, when the number was $104. July spending has yet to top his pre-recession print.
More details from the actual report:
Gallup's daily spending measure asks Americans to estimate the total amount they spent "yesterday" in restaurants, gas stations, stores or online -- not counting home, vehicle or other major purchases, or normal monthly bills -- to provide an indication of Americans' discretionary spending. The July 2015 average is based on Gallup Daily tracking interviews with more than 15,000 U.S. adults.
Americans' reported spending estimates moved little between 2009 and 2012, after the global financial crisis. By late 2012, the metric began to rise and continued to do so into 2013. Since then, it has hovered near the $90 mark, compared with much lower averages closer to $70 from 2009-2012.
In past years, spending has changed little from June to July -- the largest increase was $5 in 2011. There were slightly smaller increases of $3 in 2012 and 2014.
Gallup's conclusion will come as a surprise only to the most ivory tower-wrapped tenured economists, permabulls and, of course, Fed employees:
The last few months have not seen changes in Americans' reported spending, but this isn't unusual for the middle of the year. The U.S. economy itself has not seen significant growth this year, as GDP grew by 2.3% in the second quarter after growing slightly in the first quarter... Though gas prices remain lower than they were a year ago, which had boosted Americans' confidence in the economy, this does not seem to have had much effect on Americans' overall spending.
Why is consumer spending, especially on the margin, so important? Because it dictates 70% of the direction of US GDP. And with 5 out of 7 months now posting Y/Y declines, one wonders just where is this 2.5% (and declining) consensus GDP growth going to come from?
Source: Gallup
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Nah. That's just the drop in gas prices... 5 cents over the last year.
Higher gas prices = booming economy!
Explains the ramp
I love the smell of double seasonally adjusted napalm in the morning.
Hah, consumer spending is down in the U.S. for 5 of the last 6 months, but somehow we have positive GDP in a consumption-based service "ecomony"... LOL.. lies, all lies. This stat more than any calls the GDP numbers into complete question.
Bad news is good news!
Time to raise those Rates ya white-haired ragbag....the Economy is BOOMING!!
Speaking of "white hairs"...America is old...so the FED cuts off their CD income...anecdotal, but, the geezeres in my family have dramatically cut back on spending due to lack of interest income...and the FED's plan to force them, and thier life savings, into the Wall Street casino, well, they didn't bite...many of them grew up in the Depresion Era...they remember, and unlike the FED, do not want to repeat.
Yeah, Ben hoovered up all the loose change and hid it in bank reserves. So the geezers had to take the jobs, normally those of the youngins, just to make ends meet and increasing youth unemployment. Good work hoover Ben.
Can we not triple seasonally adjust that data? Gold is threatening to rise a dollar or two.
The Fed is like Fonzi on Happy Days
He couldn't say wrong and they can't say recession
No money no spend.
Wee Tu Broke
They are all on unpaid summer vacation according to the BLS (seasonally adjusted of course).
Damn sunny weather in the middle of summer is fucking everything up.
No snow to shovel.
Time to lavish more trillions on crooked bankers!
In the eyes of the Fed, more pent up demand just waiting to explode....
BULLISH!
The god damn Germans (fundamentals) got nothin' to do with it! [/Buford T. Justice]
Just wait til it doesn't snow over Labor Day. Blowout!
We never left the "Great Recession". We're dragging along the bottom - much like the delirious man in the desert searching for water. He keeps clawing along until he no longer can.
OT:
Russian paratroopers ready for deployment to Syria. Things heating up.
http://tass.ru/en/russia/812480?utm_medium=twitter&utm_source=ITAR-TASS
Back to school shoppers are out consuming, so they will save the day!
Im waiting for gas to go down to 5 cents a gallon. Then Im spending baby!!!!!!!!!!!!!!!
I'm waiting for 20 dollar gold and then I'm gonna get all Chuck Norris and shit and buy like crazy.
Since the survey numbers are for individuals, the GDP bump will come from more people spending. 3 million more working year over year, with a 150 million person workforce, with flat spending per person, is a 2.25% bump in spending. Ta Da!
And with 5 out of 7 months now posting Y/Y declines, one wonders just where is this 2.5% (and declining) consensus GDP growth going to come from?
They'll do what they always do- make some shit up.
John Crudele at the NY Post has some fun with the phony GDP numbers
http://nypost.com/2015/08/03/the-gdps-hilarious-false-numbers/
And 50% of americans have less than $500 in their bank. This is going to be fun!
Who needs money in the bank when you've got credit? What's holding back the economy is lack of credit...MORE DEBT PLEASE!
I just checked my bank account and I have 14 dollars in it. In the event of a bail-in I just want to do my "fair share", But I will take a picture of the atm lines. Am I broke? Don't bet the farm on it sonny. :7)
In a game of the last man standing I will still be around.
i was at an ATM the other day and the person in front of me was driving a brand new mustang with temp plates. she left her reciept, withdrew $20 and left a balance of $57.47.
0% apr for 29 months! Shoot a new car is an investment! How are people gunna know Im (Fancy - Iggy Azalea blasting)?
In all seriousness, when I read the post about housing debt it made me think...
We all agree renting rims is fiscally irresponsible....
But renting an apartment is...? How many people own land in America? I cant find the answer. Im guessing not many. Thats scary to me.
Do whatever you can to get a parcel of land big or small but have it paid for - the feeling you get from a little bit of freedom is worth all the struggle.
exactly my plan
Maybe she paid cash for the car and was awaiting her next electronic deposit from her trust fund.
Smart.
Consumers are just listening to Dame Janet's advice and are preparing for her rate hike.
Some will always get a $600.00 hair cut - the rest of us just get a hair cut. Some select on 5th ave. the rest of us have the dollar stores. Just get in line sheeple and have your cards ready.
Five years ago I felt nervous about the future economy so I decided to become more self-sufficient. I am of advanced years but keep in shape so I developed a good size garden and supplimented my home heating with a wood-burning stove. It was not as hard as I feared and now the garden has provided much food, the rabbits do what rabbits do, and the firewood is stacked. Much satisfaction and now I can tell the system to screw itself to some degree.
Several cords of firewood stacked in the summer is a beautiful thing. I try and keep a winter ahead in case I break a leg.
Consumers were clearly saving for Christmas in July. They might have been confused by fake snow and stayed home. This pent up demand will certainly be unleashed in August. /s
The good news is that Planned Parenthood will continue to harvest Black baby organs for profit.
Wonder how gun sales and ammo sales are doing in the face of declining retail.
Tyler?
I am boycotting the economy. I spend as little as possible. Very few meals away from home, and certainly no beer with dinner ( $5 for a beer? Does anyone else remember $.50 drafts?). AC at 80, groceries at Sam's Club and I cancelled my landline. It feels good to be in control rather than controlled and manipulated.
For most people currently alive, that figure is between $1 and $20.
Call me old-fashioned, but current-generation iPhones are not a human right. I just can't bring myself to shed a single tear for those poor rich souls with a meager $90 to waste on toys, junk, stuff, and crap, each and every (miserably impoverished) day.