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BizReport : Ecommerce archives : May 09, 2011

Report: People are buying, overall spending totals flat

While consumers are spending money - eating out, seeing movies, shopping at local malls - the general economy isn't seeing huge improvements in the United States. That, according to new data out from Gallup, which finds that although consumers are spending money, those spending totals year to year are basically flat.

by Kristina Knight

According to the data in April 2011, consumers spent about $65 per day compared to average spending totals of $64 per day in April 2010. This, even though the cost of many commodities has increased in the past year; the 2011 numbers are nearly that same as 2009 numbers, as well.

Diving a little deeper into the results, upper-income consumers are spending slightly more, but not enough to change the flat rating. Gallup found that in April upper-income spending increased to $112 per day (average) from $108 per day (average, March). Meanwhile lower income consumers are spending basically the same: $58/day average compared to $57/day average (March).

The report authors suggest, "Economic confidence is plunging. Gas prices are surging, as are food prices. Although job creation reached a post-recession high in April, it has been essentially flat for the past three months. Neither upper-income consumers nor their middle- and lower-income counterparts are spending more than they did a year ago. So it seems unlikely that the nation's retailers will be able to match their May 2010 sales levels and, simultaneously, it is increasingly likely that the slowdown in economic growth during the first quarter will continue in the months ahead."

Why aren't consumers spending? Some experts believe the 2008 recession actually changed spending habits of all income demographics. Over time those changes - spending generally less, price comparing and coupon utilization - may change, but for now the recession is still close in the memory banks, keeping consumers from spending more money.

Tags: consumer spending, ecommerce, economic recovery, Gallup, online shopping

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