Consumer spending took a dip in JuneDate posted: 7/25/14 08:45:00 AM
In the face of rising employment rates across the nation, consumer spending isn't following suit, falling back slightly in June, according to a poll from Gallup.
Self-reports of daily spending for Americans fell to $91 in June, which is down from a six-year high of $98 in May, although it's in a similar range to June 2013 when the average daily spending was $90.
June's $91 figure shows that spending among consumers is at an interesting place in time. While that number is much higher than the $60 and $70 average largely seen from 2009 to 2012, the total in June was the first decline in monthly average since the first month of the year.
Gallup reported the $7 decline from May to June was the largest recorded by the agency since 2008, when June spending plunged by $10. Despite that fall, the daily spending of $104 in June 2008 was the highest average ever posted for that month in six years of study.
The nation's largest retailer feels the decline
The drop in consumer spending isn't lost on Bill Simon, an executive at Wal-Mart. Simon told Reuters that despite swelling employment numbers, spending trends at Wal-Mart haven't seen a boost.
"It's really hard to see in our business today … that it's gotten any better," Simon said. "We've reached a point where it's not getting any better but it's not getting any worse - at least for the middle (class) and down."
The lower- and middle-income customers that typically shop at Wal-Mart have changed their shopping habits, according to Simon. Unfortunately for Simon and Co., they haven't changed for the better.
"They're adapting to what has been a difficult macroeconomic situation," he said.
Simon stated the majority of American shoppers who routinely go to Wal-Mart are spending a lot during the holiday and back-to-school seasons, but they aren't spending much in between those major events.
"People think we do better in a down economy," Simon said. "We don't. We do better when the GDP is growing, when the economy's good and we really need that in the long run for the business to improve."
Wal-Mart, which is fighting off competition from Dollar General, stated that its profits fell nearly five percent in the first quarter of 2014. The retail giant also expects its second-quarter sales to be weaker than expected.
More Americans finding work
But it's not all bad news for the economy. Regardless of lower spending rates, more Americans are finding jobs in recent months, according to the Labor Department.
For the fifth month in a row, the nation's economy added more than 200,000 jobs. The Washington Post reported that's the longest streak of such employment gains since the late 1990s, as the nation's unemployment rate dropped to 6.1 percent.
"It's a strong report, there is no question about it," Josh Feinman, chief global economist at Deutsche Asset & Wealth Management in New York, told Reuters. "The labor market is improving at a seemingly stronger rate than before, the slack is being absorbed, we are chipping away."
Another solid indication that the U.S. economy is kicking into gear is the growing number of full-time employees. Gallup reported that 45 percent of Americans were full-time employees in June, which is one of the best rates since Gallup first started following the full-time employment data in January 2010.
Gallup considers any Americans ages 18 and older that are working for an employer at least 30 hours a week as a full-time employee. The highest percentage ever reported came in October 2012, when 45.7 percent of Americans worked full-time.
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