U.S. consumers spent more money in December than in any month since December 2008. In a self-reporting poll from Gallup, consumers' average daily spending in December averaged $83, up from $73 in November and well above the peak of $76 November 2011. Gallup noted that this is the first time the spending survey has topped $80 since the recession of 2008-2009.
Average spending among households with less than $90,000 in income rose to $67 in December, the highest its been in four years. Among higher income households, spending jumped to $155 from an average of less than $120 in November.
Gallup also notes that predicting spending for 2013 remains problematic:
Whether the trend toward greater spending continues in 2013 is unclear. Most Americans are seeing a decrease in take-home pay with the expiration of the Social Security payroll tax holiday, but President Barack Obama's and Congress' efforts to avoid the fiscal cliff kept federal income tax rates the same for most Americans.
Whereas December is usually the strongest month for consumer spending, January is typically one of the weakest, so it is unlikely spending will remain at the higher level reached in December. One key to understanding the trend in consumer spending will be how January 2013 spending compares with prior Januaries.
For the first 11 months of each of the past four years, spending averaged $9 to $12 less than December spending. That is why December is the get-well month for U.S. retailers and small-business owners.
Filed under: 24/7 Wall St. Wire, Consumer Goods, Research