Economic Recovery Sputters Amid Weak Consumer Confidence

The U.S. economy continues to sputter along like a car down to its last gas cap’s worth of fuel before stalling on the side of the road.  Jobless claims figures unexpectedly rose and now the latest Gallup poll finds that consumer spending is down considerably from a year ago.

Spending in stores, restaurants, gas stations, and online averaged $55 per day in the week ending Jan. 9 , a decline from the $68 average for the same week in 2010.Spending among those making $90,000 or more annually) averaged $102 per day in the week, down from $127 during the same week in 2010.  This trend may not be as ominous, though, as it seems.

The aftermath of the holidays may be weak because many don’t feel like shopping because they have what they need, at least for the moment.  Retailers slashed prices to the bone during the holiday season, causing shoppers to open their wallets both in bricks-and-mortar locations and online.   Many of these discounts may be continuing, enabling shoppers to get more by spending less that they did last year.  People are also far more reluctant to get in debt than they were before the Great Recession.

“Lower- and middle-income consumers, who remain focused on using cash, may spend more on holidays and for special events, but then feel the need to pull back on spending shortly thereafter to compensate,” according to Gallup. ” Upper-income consumers, who have more disposable income to spend, might splurge at certain points during the year, but hold back on their spending more generally, as they did in 2009 and 2010.”

In other words, the super liner that is the U.S. economy is turning from the iceberg at too slow of a rate to make people stop worrying about the possibility of a collision.

The poll was based on telephone interviews conducted during the week ending Jan. 9, 2011, with a random sample of 3,509 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.

–Jonathan Berr