Consumer Spending Growth Stalls Out as the Rich Close Their Wallets Again

Today, Gallup released a weekly survey of consumer spending — a good metric to keep an eye on, as it accounts for around 60 percent of the U.S. economy. Consumer spending had made gains last month, as high-income Americans returned to malls and restaurants. But more recent surveys show that the blip was temporary, and consumption remains around the same level as it has for the past year, tracking up only slowly.

Gallup surmises, sensibly, that upper-income Americans are spooked by the continued economic bad times and the crisis in Europe :

With middle- and lower-income consumer spending remaining flat as underemployment remains high, it seems that a recovery in overall consumer spending will depend to a large extent on upper-income consumers. It may be that these consumers, despite having a desire to return to spending, have been spooked by recent signs of a weakening U.S. economy, combined with the oil spill in the Gulf, global financial difficulties, and possibly future tax uncertainties. As a result, upper-income Americans, like other consumers, may be returning to the new normal spending levels of 2009. If this turns out to be the case, it could easily mean a slower economy than many had hoped for as the remainder of the year unfolds.