"Our Children and Grandchildren are not merely statistics towards which we can be indifferent" JFK

Sunday, November 28, 2010

Recent spending trends as well as some consumer attitudes are not particularly encouraging (Gallup)

It will be most interesting to see if CNBC will apply a positive spin on the recent consumer spending data results from Gallup. Unfortunately, Gallup shares a similar CNBC cheerleader perspective on the recently released initial jobless claims.

Both focus on the seasonally adjusted figure versus noting a 55,000 increase in non-seasonally adjusted claims. One can pretend all they want with government adjusted figures, however the reality is 55,000 more people filed initial jobless claims and we as consumers do not seasonally adjust our checkbook balance.

PRINCETON, NJ -- Self-reported daily consumer spending in stores, restaurants, gas stations, and online averaged $66 per day in the week ending Nov. 21 -- not much different than the $69 of the same week in 2009 -- but below the $74 comparable of the same week in 2008.

Although the outlook for Black Friday weekend is better than it was a year ago, at first glance, recent spending trends as well as some consumer attitudes are not particularly encouraging for Black Friday and Christmas holiday sales:
  • Nine in 10 consumers say they continue to watch their spending closely -- essentially unchanged from the 89% of the same week in 2009.
  • Seventy percent say they are cutting back on their weekly spending -- consistent with the 69% of 2009.
  • Nineteen percent of Americans worry that they spent too much money "yesterday" -- also the same as in 2009.
However, despite the year-over-year comparables in actual consumer spending, there are some positives in consumer spending attitudes this month:
  • Half (51%) of Americans say they feel able right now to make a major purchase, such as a car, appliance, or furniture -- up from 46% in the same week of 2009.
  • About 6 in 10 (58%) say they feel pretty good about the amount of money they have to spend these days -- up from 54% in 2009.
  • Americans say they will spend an average of $714 on Christmas gifts this year -- up sharply from the $638 they estimated in November 2009.
Further, Gallup data also show the economic backdrop for consumer spending is improving:
  • During the week ending Nov. 21, 41% of Americans rated current economic perceptions "poor," compared with 48% during the same week in 2009
  • Gallup's U.S. unemployment rate, without seasonal adjustment, fell to 9.2% in mid-November
  • Gallup's Job Creation Index stands at +12 for the same week, with 30% of employees reporting their companies are hiring and 18% saying they are letting people go -- much better than the +1 of 2009, when 24% of employers were hiring and 23% firing, and consistent with the most recent drop in unemployment claims to 407,000 -- the lowest level since July 2008. Gallop Report

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