FACT: Consumer spending is increasing, despite the tepid economic environment.
Consumer spending reached a four-year high in December 2012. Americans reported spending an average $83 per day in stores, online, and in restaurants - up from $73 in November and the highest monthly figure Gallup has reported since December 2008.
Retail sales were up 4.4% in December 2012 from last year, according to the U.S. Census Bureau.
Outstanding consumer loans reached $1.1 trillion in the first week of January, a 3% increase from January last year.
FACT: Consumers are paying off credit card debt are record levels.
During the third quarter of 2012, delinquencies on credit cards issued by banks fell to an 18-year low, according to results from the American Bankers Association’s Consumer Credit Delinquency Bulletin.
The number of consumers more than 30 days late on payments falling to 2.75% in the third quarter, well below the 15-year average of 3.89%,
FACT: Payroll taxes could potentially weaken consumer spending in 2013.
On January 1, 2013, the payroll tax reverted to 6.2% of workers’ salaries from its temporary setting of 4.2%.
The increase means households will have $18 to $20 less to spend each week on average, or $900 to $1,000 less a year, according to the Tax Policy Center.
FACT: Consumer confidence headed into 2013 is shaky at best.
Consumer confidence dropped off sharply in December due to fiscal uncertainty, according to the Conference Board report. This is expected to continue until the debt ceiling is resolved.
Consumers expecting business conditions to improve over the next six months declined to 17.6% from 21.3%, while those expecting business conditions to worsen increased to 21.5% from 15.8%.
Consumers anticipating more jobs in the months ahead declined to 17.0% from 19.5%, while those expecting fewer jobs increased to 27.3% from 21.2%.