PRINCETON, NJ -- Even as the nation looks back to 9/11 and the Lehman Brothers collapse that signaled the start of the financial crisis, not only is consumer confidence up, but it matches its highest level of the past 20 months. Even so, the new normal finds consumer spending 31% below year-ago levels and job creation at only 22%, compared to 36% at this time last year.
What Happened (Week Ending Sept. 13)
Consumer Confidence bounced back up to its 20-month high last week, as the percentage of Americans saying the economy is "getting better" increased to 41%. Confidence is essentially the same as it was a month ago (40%) but is far better than a year ago (16%). Correspondingly, 53% of consumers last week said the economy is "getting worse," compared to 77% a year ago. At the same time, Americans' pessimism about the current economy is little worse today than it was a year ago: 44% rate it "poor" now, compared with 41% then. Still, consumers are much more confident about the future direction of the economy today than they were before the Lehman Brothers collapse on Sept. 15, 2008.
Consumer Spending gave up its pre-Labor Day uptick, as self-reported average daily spending in stores, restaurants, gas stations, and online fell by $10 per day -- resulting in a return to the $60 spending level that seems to characterize the spending new normal of recent months. Spending remains down 31% from the $87 average daily spending during the same week a year ago -- suggesting that spending in 2009 continues to compare highly unfavorably to that of 2008, even as year-ago comparables ease.
Job Creation remained weak, with 22% of employees saying their companies are hiring -- identical to the prior week and down from 24% a month ago. The percentage of companies reported to be hiring is down 39% from the same week a year ago. Still, the gap between job creation and job loss diminished to 1 percentage point, as 23% of Americans said their companies were letting people go -- an improvement from the 26% of the prior week.
What to Watch For
"Still, Gallup data suggest that -- despite all the other national issues -- the lack of job creation and consumer spending are likely to become more prominent in the national dialogue in the months ahead. "
On Tuesday morning, the Commerce Department will report retail sales for August and, as the consensus estimate suggests, spending should be up slightly from July. Still, Gallup spending data show that consumer discretionary spending continues to run far below year-ago levels. Despite the continued improvement in consumer confidence about the economy's future, consumers seem to be stuck on a lower spending "new normal."
As usual on Thursday morning, the Labor Department will report jobless claims for the week after the Labor Day weekend. Last Thursday, reported claims were far below the consensus estimate -- at 550,000 for the week ending Sept. 6. Gallup's tracking of job creation and job loss suggests that this decline was probably an aberration related to the Labor Day holiday. It seems likely that government-reported jobless claims will also be distorted when reported this Thursday, but should exceed the 550,000 reported the prior week. Regardless of what the Labor Department reports, Gallup's Job Creation measure indicates that the decline in job creation continues -- but the rate of job loss has also declined slightly.
Right now, the nation's attention, as well as that of the Congress, is consumed by the healthcare debate. And, as indicated by the president's address Monday -- a day before the anniversary of the Lehman collapse -- Wall Street and the nation's financial institutions are also focusing, along with some in Congress, on the many issues surrounding new financial regulations.
Still, Gallup data suggest that -- despite all the other national issues -- the lack of job creation and consumer spending are likely to become more prominent in the national dialogue in the months ahead. This is particularly true if current trends continue as the holiday sales season approaches.
For Gallup Poll Daily tracking, Gallup interviews approximately 1,000 national adults, aged 18 and older, each day. The Gallup consumer perceptions of the economy and consumer spending results are based on random half-samples of approximately 500 national adults, aged 18 and older, each day. The Gallup job creation and job loss results are based on a random half sample of approximately 250 current full- and part-time employees each day. Results from the week of Sept. 7-13, 2009, are based on telephone interviews with 3,010 adults for the consumer perceptions and spending questions. For these results, one can say with 95% confidence that the maximum margin of sampling error is ±2 percentage points. Results for the job creation and job loss questions are based on interviews with 1,643 employees, with a maximum margin of error of ±3 percentage points.
Interviews are conducted with respondents on land-line telephones (for respondents with a land-line telephone) and cellular phones (for respondents who are cell-phone only).
In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.