Consumer Spending Strong in March

I’ve been reporting on the oddly strong consumer spending numbers out of Gallup for the last few months. Well it seems these numbers are finally starting to show up in the mainstream numbers. The Gallsup consumer spending numbers are still extremely strong – far stronger than I expected after the tax increases that hit consumers in January.

Here is an “average of Average” chart for Gallup consumer spending. The chart shows 30 day average of the 14 day average, so it’s how the 14 day average performed over the last month. You can see it is much, much higher for 2012 than for 2009-2011, and 2013 is higher yet.

Consumer spending became much stronger in 2012 – averaging nearly $5 per day better than 2011, and $8 per day better than 2010. I think it is important to notice the late summer low in 2011 is much higher than the late summer low in 2010. While the average in 2011 is only a bit higher than it was in 2010, the extremes in the second half 2011 were much smaller. The low in early 2012 is higher than the lows in 2009 and 2010.





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3 years 11 months ago

The Daily Jobs Update adjusted withholding tax data shows a consistent decline over the past few months. This suggests average after-tax incomes have been declining while consumer spending has been picking up. Do you think this will be reflected soon by new lows in private sector saving? In other words, is this organic growth or debt fueled spending by households trying to keep up with rising prices?

Philip Diehl
3 years 11 months ago

Michael, do the 2013 numbers reflect the February 1 wake-up call wage earners received when January paychecks arrived with the payroll tax increase? I can’t tell from the graph whether February is included or not.