- 51% of Americans say they have been spending less money in recent months
- Highest percentage since 57% in 2010
- Those spending less are split on whether change will be temporary or permanent
WASHINGTON, D.C. -- Fifty-one percent of U.S. adults say they have been spending less money in recent months than they used to, an increase of nearly 20 percentage points from a year ago. The last time a majority of Americans reported spending less than usual was in 2009-2010.
Gallup first asked Americans about their spending habits in 2009, during the Great Recession. Consistent majorities in 2009 and 2010 said they were spending less, including a high of 57% in 2010, after the Great Recession had technically ended but at a time of a nearly double-digit unemployment rate. In subsequent years, fewer Americans indicated they were spending less money, with last year's 32% the lowest in Gallup's trend.
The April 14-28 poll finds the percentage of Americans spending less than usual back to majority level as the coronavirus situation has forced widespread closures of businesses and most states have issued stay-at-home orders for their citizens.
One difference between now and the last time a majority of Americans said they were spending less is that those who are pulling back are more inclined to think it will be a temporary change in their spending patterns. Currently, 47% of those who report they are spending less expect it to be a temporary change compared with 33% who said the same in 2010. Now, 53% say the reductions will become their "new, normal pattern for years ahead," whereas 67% said so in 2010.
All Income Groups Report Spending Cutbacks
Majorities of both upper- and middle-income Americans say they are spending less money in recent months, while slightly less than half of lower-income Americans say the same.
The shift toward spending less money has been more pronounced among upper- and middle- income Americans than those in the lower-income group.
|Lower-income (annual household income less than $40,000)||34||45||+11|
|Middle-income (annual household income $40,000-$99,999)||33||56||+23|
|Upper-income (annual household income $100,000 or more)||28||54||+26|
Reports of spending cutbacks are similar by age, race, employment and parental status.
Democrats, including Democratic-leaning independents (58%), are modestly more likely than Republicans and Republican leaners (47%) to say they are spending less money. An analysis of the data suggests that partisanship is a factor for middle- and upper-income Americans but not lower-income Americans.
The scope of the coronavirus economic downturn is just beginning to be realized, with new unemployment figures due this week after last week's report on economic growth. The nearly 5% decline in U.S. gross domestic product (GDP) in the first quarter of 2020 was larger than economists predicted. Consumer spending accounts for roughly two-thirds of GDP, so the effect of the pullback in spending on economic growth is obvious.
An encouraging sign for the economy is that many Americans who have cut back on spending expect it to be a temporary change. But whether their spending can return to prior levels depends on the extent to which businesses can accommodate demand while observing social distancing requirements likely to be in place for the foreseeable future. It will also depend to a large extent on how comfortable consumers are with resuming their normal consumer habits, especially in categories that are typically discretionary, like travel, dining and recreation. Also, if high levels of unemployment persist, the other factors may not matter if many Americans lack money to spend.
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