So much for the post-cold-weather, pent-up demand stoked spending spree as human beings emerge from hibernation and buy-buy-buy all the food/iPads/clothes/cars they did not buy during the stormy first quarter... First, Goldman confirms that retail sales actually fell 2%, and then, more broadly, Gallup confirms [4] that Americans' reports of daily spending in April averaged $88, virtually the same as in March ($87) and February ($87).
As Gallup reports [4],
Americans' reports of daily spending in April averaged $88, virtually the same as in March ($87) and February ($87).
[5]
These figures are based on Americans' self-reports of the total amount they spent "yesterday" in stores, gas stations, restaurants, or online -- not counting home and vehicle purchases, or normal monthly bills.
The April spending estimate can be considered a mixture of positive and negative news for the economy. On the positive side, the $88 average remains on the high end of what Gallup has measured historically, and is clearly above the depressed spending that represented the "new normal" during the recessionary and post-recessionary period of 2009 through 2012. On the negative side, the April estimate is no higher than the estimate from March 2014 or April 2013, suggesting no further growth in spending.
Bottom Line
The lack of growth in consumer spending is a concern for the U.S. economy, especially considering the effect the extreme weather in many parts of the country may have had on spending during the winter months. Perhaps more telling for the economy will be the trajectory of spending in the coming months. May and June spending estimates have usually outpaced April estimates.
Keep praying to the god of hockey-sticks that the now grossly revised down GDP for Q1 is merely setting the US up for the mother of all v-shaped recoveries (or not)...
[6]
Charts: Bloomberg