What Is Consumer Discretionary Spending?

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"Consumer discretionary spending" is a term of art used in economic survey reports to discuss activity and trends in consumer spending. Consumer discretionary spending is sometimes referred to as "non-essential spending," "non-necessities spending," "spending on discretionary consumer goods and services" and similar phrases. Economists and policymakers pay careful attention to indexes of consumer discretionary spending as an indicator of consumer sentiment.

Gallup

  • The Gallup survey and polling company is a key source of statistics and trends on consumer discretionary spending. Gallup's consumer spending measure is a poll of consumer spending based on a detailed review of what a consumer spent the day before being surveyed. The survey does not include spending on household bills or on major expenses like a car or home, and is considered an index of spending on discretionary items.

U.S. Bureau of Labor Statistics

  • The Bureau of Labor Statistics regularly surveys the spending habits of American consumers. BLS does not use the phrase "consumer discretionary spending," but the agency's Consumer Expenditure survey is closely monitored as an index of spending habits in the United States. BLS has reported Consumer Expenditure results as "expenditure shares for non-necessities."

Components

  • Consumer discretionary spending is closely related to the common-sense notion of shopping. Gallup's measure of consumer discretionary spending includes retail expenditures in stores, restaurants and gas stations, as well as online spending.

Trends

  • In January 2011, average consumer discretionary spending was $58 per day, according to Gallup. This was lower than the January 2010 average spending of $62 a day, and close to half the January 2008 average of $97 a day. Gallup attributes the lower spending to several factors, including economic uncertainty, a December "spending spree" that lowered January spending, and bad winter weather across the country.

References

  • Photo Credit Spencer Platt/Getty Images News/Getty Images
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