One big question for the post-coronavirus future is how consumers will react once states and nonessential businesses start reopening. Gallup may have some insight with its latest poll on consumer spending.
In short, consumers have pulled back spending at a level last seen during the Great Recession.
“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 agoConsumers Pull Back on Spending Similar to Great Recession,” Gallup writer Jeffrey Jones reported earlier this week. “The last time a majority of Americans reported spending less than usual was in 2009-2010.”
In 2009 and 2010, consistent majorities said they were spending less, including a high of 57% in 2010, according to Gallup. Since then, the percentage of the population saying it’s spending less had not reached 45%, and in fact hit a decade low of 32% last year.
One important difference is the expected duration of the spending pullback. Nearly half of those who say they have cut back on spending (47%) think it will be temporary, compared with 33% who said the same in 2010, and 53% say the reductions are now their “normal pattern for years ahead,” compared to 67% in 2010.
“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,” Jones states. “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.”