By Hal M. Bundrick
NEW YORK (MainStreet) Last month, Americans opened their pocketbooks and spent money at the highest daily level since the global financial crisis of 2008, according to research by Gallup. In a telephone survey conducted each evening, respondents are asked how much money they spent the prior day excluding household bills, as well as home and car payments. Americans reported spending $96 per day in December, the most since September 2008 and the highest average for any December during the six years the polling group has been tracking daily outlays.
This self-reported gauge of discretionary spending dropped dramatically in the first quarter of 2009, and then began to trend upward towards the end of 2012. Rising throughout 2013, it ending the twelve month period standing at an average $16 per day higher than the rate recorded at the beginning of the year.
The $96 daily spending average in December 2013 was up from $91 in November and is the highest of 2013, just above the $95 August rate.
Gallup says it's a consumer spending tendency worth noting.
"The trend in consumer spending over the past six years presents a clear pattern," Frank Newport, Gallup editor in chief says in the report. "Spending was at its highest point in the first three quarters of 2008 -- the year in which Gallup started tracking daily spending -- including the monthly high to date of $114 measured in May. Then came the economic collapse. Spending dropped to its nadir of $58 by January 2011. Since then, it has gradually increased, and spending last year clearly was the most robust since 2008."
While the report admits that Americans are reporting a tendency to prefer saving over spending, the trend of spending growth bodes well for the economy.
"Consumer spending is one of the main engines of economic growth, and its trajectory in the months ahead will be an important indicator of the economy's health," Newport writes. "If the current trends continue, average daily spending could break through the $100 mark on a routine basis, and thus denote a return to levels that characterized spending in pre-recession times."
Gallup's measure of job creation dipped slightly at the end of the year, suggesting some caution in concluding that the economy is on a "straight linear upward trajectory."
Written by Hal M. Bundrick for MainStreet