The U.S. is approaching the 5th anniversary of its economic “recovery,” but a new survey indicates there’s no reason to celebrate the occasion.
On Monday, Gallup reported that its survey of consumer spending showed no increase in March from February levels. According to Gallup, respondents to the survey reported spending, on average, $87 a day in March. This was the same level reported in February, and slightly lower than the amount reported in March 2013. The report on per-capita consumer spending is consistent with stalled economic growth.
For the last three years, during the economic recovery, consumer spending in March was higher than the previous year. Consumer spending accounts for about two-thirds of the overall economy. Without stronger growth in spending, it will be difficult for the economy to generate real growth.
Although government figures show that total retail sales, excluding motor vehicles (in line with Gallup’s definition of consumer spending), rebounded in February after January’s anemic sales, year-over-year sales were up by only 1.6% in January and 1.3% in February — the weakest retail growth figures since November 2009. Given the Gallup data, it is reasonable to expect that the March report, due April 14, will show more of the same.
At the end of April, the Commerce Department will release its first estimate of 1st Quarter GDP growth. In recent weeks, the federal government has revised downward its estimate of 4th Quarter growth in 2013. The current measure of GDP growth at the end of 2013 is almost 20% lower than the advance estimate.
The Gallup survey suggests that 1st Quarter economic growth will continue this weakness. The Labor Department reported last week that the average number of hours worked in March were lower than a year ago. Average weekly earnings were up a slight 1.9% for the year, just ahead of inflation.