Tag Archives: Consumer Spending

Americans reported spending less money in June compared to May, marking the first monthly decline in self-reported consumer spending this year. In a survey of nearly 15,000 U.S. adults, Gallup found the daily amount spent by Americans was an average $91, down from a six-year high of $98 the month prior and about level with last year. The June record for average daily spending is $104, achieved in 2008.

In its third and final estimate of first-quarter growth, the Department of Commerce recorded an annualized 2.9 percent decline in GDP throughout the year's first months. While analysts expected GDP growth to shrink further following the last estimate of a 1.0 percent decline, the reported number represents a sharper downturn than the 1.8 percent contraction that had been forecast.

A weaker-than-expected first quarter has researchers at Fannie Mae amending their forecast for growth in 2014, but they still project acceleration as the year progresses. In its Economic and Housing Outlook for April, Fannie Mae's Economic and Strategic Research Group notes economic activity slowed in Q1 even more than was forecast, partly due to a sharp decline in inventory investment as consumer spending waned.

Consumer sentiment retreated last month to an index reading of 80.0, down 2 percent from February’s 81.6 but an improvement on last year’s 78.6, according to a report released by Thomson Reuters and the University of Michigan’s Survey Research Center.

The Surveys of Consumers' Index of Consumer Sentiment dropped to 81.2 in January from December's 82.5. Compared to a year ago, January's survey was up an even 10 percent from 73.8.

In its “advance” estimate of real gross domestic product (GDP) last quarter, the Bureau of Economic Analysis (BEA) put growth at an estimated annual rate of 3.2 percent. For all of 2013, the bureau estimates real GDP increased 1.9 percent compared to a gain of 2.8 percent in 2012.

As we head toward the close of 2013, many wonder what the new year will bring for economic growth, what plans the Federal Reserve has for its stimulus, and how employment and the housing market will take shape. IHS Global Insight recently released its 2014 outlook, addressing these and other factors affecting the U.S. and global economies in the coming year. IHS says global economic growth will increase from 2.5 percent this year to 3.3 percent next year, with the U.S. growing 2.6 percent, up from 1.7 percent.

According to Fannie Mae's November National Housing Survey, positive momentum in the housing market has slowed as Americans remain cautious about their personal finances and the overall state of the economy. Nearly two-thirds of those surveyed believe the economy is on the wrong track. Within the next year, 22 percent expect their personal finances to worsen and only 45 percent expect home prices to increase.

One of the earliest phenomenon of the housing bubble was the ascension of home prices, making housing unaffordable relative to incomes. Markets across the nation cascaded from affordable to unaffordable--a key signal that prompted us to warn of the coming housing downturn. And it now appears that this symptom has cropped up once again, as almost all of California's coastal cities are now unaffordable.

Consumer sentiment rebounded in November, though Americans haven't yet forgotten the government shutdown that brought confidence down in October. The Index of Consumer Sentiment, a joint measure tracked by the University of Michigan and Thomson Reuters, rose to 75.1 for the final November tally, making up some of the ground lost in October, when it dropped to 73.2. Last year, the index was measured at 82.7.