Gallup's self-reported consumer spending declined to an average of $56 per day during the week ending March 17 -- essentially matching the lows of 2011. Weekly spending increased steadily during February and peaked in the week ending March 6 at $73 -- a paycheck week. Since that time, spending has been trending generally down.
The recent decline in spending is consistent with a lagged response to the drop in economic confidence Gallup has recorded since mid-February. It also aligns with consumers pulling back on their spending in the face of surging gas and food prices, budget battles in Washington, D.C., a housing decline that has not bottomed out, continued unrest in the Middle East, financial problems in Europe, and a growing tragedy in Japan.
The Fed seems capable of driving Wall Street and commodity prices higher no matter what happens. However, it seems incapable of providing benefits to Main Street as economic growth slows and prices head ever higher. Labels: consumer spending, European financial crisis, food prices, gas prices, Japan, main street, Middle East, wall street