Americans know they're spending less because they have less to spend. So, it doesn't take a national poll to let consumers know spending is down---way down. However, seeing the concrete numbers compared to how we spent in the past is rather startling.
This time last year, consumers were hitting a 3-day spending average of $140. The 14-day average hovered around $98. In February 2009, we're not doing half as well, with the 3-day average cut beyond half at only $61. The 14-day average sank even lower to $59.
Consumer spending measures by Gallup, tracks the average dollar amount Americans report spending or charging on their credit cards on a daily basis, not counting the purchase of a home, motor vehicle, or normal household bills.
CURRENT AMERICAN SPENDING HABITS
3-Day Average: $61
14-Day Average: $59
Source: www.Gallup.com
Respondents were asked to think about the day before they were surveyed and results are presented in both a three-day and a fourteen-day rolling average.
WHAT DOES IT MEAN FOR POLITICIANS & AMERICANS?
Politicians typically don't like to sit idly by while the economy takes a nose dive---hence the economic stimulus plans. Regardless of whether the loss is manufacturing jobs, a deceleration of median wages or a full blown recession.
A Congressional intervention aimed at a normal cyclic economy will usually focus on providing assistance to those caught in the downturn of the housing market, just like the legislative action focused on the devastation after Hurricane Katrina.
Economists constantly worry about "contagion effects" of, for instance, the mortgage fallout on the broader economy. However, their concerns are warranted when it comes to contagion effects in Congress, too.
If the labor market deteriorates, expect additional unemployment assistance and extensions. If the trade deficit worsens, expect more assistance to import sensitive industries. If home heating prices clim too high, expect relief to lower income families should be expected in the winter months.
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