US Consumer Spending at $90 per Day in June, XLY Down 0.19%
2 Reasons Why US Markets Were Down on July 6
Consumer spending is critical to headline growth in the United States
In the United States (SPY)(IVV), household spending represents about 68% of the gross domestic product (or GDP). In comparison, household spending represents 34% of the GDP in China (FXI), 56% in Germany (EWG), 60% in India (EPI), and 52% in Russia (RSX). Therefore, consumer spending is critical to headline growth in the United States.
On July 6, the Gallup consumer spending report couldn’t buffer the fall in the SPDR S&P 500 ETF (SPY). SPY fell to $206.72 and the Consumer Discretionary Select Sector SPDR ETF (XLY) fell to $77.05, recording a 0.19% fall. Consumer firms Keurig Green Mountain (GMCR), Michael Kors (KORS), and Coach (COH) were down 3.44%, 2.88%, and 2.60%, respectively, by the July 6 market close.
Gallup spending measure strong, $90 in June
Gallup tracks daily discretionary expenditures through more than 15,000 interviews with US adults. It surveys respondents on their discretionary spending expenditure the previous day. Gallup’s self-reported consumer spending poll for the United States in April came out on Monday, July 6. According to the report, average daily consumer spending for Americans stood at $90 in June. Spending is down slightly by $1 from the May 2015 average of $91, but it’s higher than the $83 daily average recorded in the first quarter this year.
Spending has picked up in the second quarter in the United States
Historically, spring has warmed up consumer spending. The second quarter has therefore seen consumer spending gain from the $83 average in Q1 to a $90 average.
July 6 also saw a number of key economic indicators come out in the Eurozone and elsewhere. In the next article of this series, let’s start with the Eurozone and take a quick look at these readings to gauge the impact of the European Central Bank’s monetary stimulus measures.
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