Americans have in recent weeks become slightly less likely to say they are cutting back on their weekly spending, according to Gallup data. Gallup analysis suggests this means that actual consumer spending may increase as summer gets underway.
Percent Cutting Spending Down 7% in 2 Yrs
When Gallup first asked US consumers if they were cutting back weekly spending in June 2009, a two-year high of 72.8% said they were. In June 2011, 67.8% of consumers say they are cutting back weekly spending. That means the percentage of consumers cutting weekly spending has fallen about 7% in two years.
On a month-over-month basis, the percentage of consumers cutting back weekly spending has fallen about 4% from 70.4%. However, a two-year low 65.4% of consumers answered this question positively in February 2011, meaning the percentage has risen 4% since hitting that historic low point.
Although Gallup predicts consumer spending may increase in the next few months, it also says the results show that the majority of Americans consistently view themselves as making an effort to cut back on spending, which in turn underscores the idea that most Americans are looking for ways to save money.
More than Half of All But Highest Income Consumers Plan Cutbacks
Higher-income Americans are less likely to say they are cutting back on spending than are those who have lower incomes. Still, the only income bracket with less than half of consumers saying they plan to cut back spending is among those earning $240,000 a year or more, and at 47% the percentage is close to half. Fifty-four percent of consumers in the next-highest income bracket ($120,000 to less than $240,000 a year) plan spending cutbacks.
The income bracket with the highest percentage of consumers planning cutbacks (76%) is the third-lowest, $12,000 to less than $24,000 a year. Seventy-five percent of consumers in the lowest bracket (less than $6,000 a year) plan cutbacks.
Survey Results Often Predict Short-Term Spending
During the last two years, historical Gallup data shows that increases in the percentage of Americans saying they are cutting back on spending based on five-week rolling averages have predicted a decrease in average reported spending a week later. Conversely, decreases in the five-week rolling average have been followed by increases in spending a week later.
Gallup says these statistical relationships are not extremely strong, but suggest that when there are changes in the percentage of Americans telling survey interviewers they are cutting back on their spending, actual spending, at least as measured by Gallup’s spending measure, does, in fact, change in the following weeks.
Harris: 6 in 10 Likely to Cut Restaurant, Entertainment Spend
Six in 10 US adults are likely to reduce spending on eating out (61%) and entertainment (59%) in the next six months, according to results of a May 2011 Harris Poll. These figures are relatively flat compared to recent history, but down significantly from March 2009, during the worst period of the recession.
About the Data: Results are based on telephone interviews conducted as part of Gallup Daily tracking from June 2009-May 2011, with weekly random samples of approximately 800 adults, aged 18 and older, living in all 50 US states and the District of Columbia.