Discover U.S. Spending Monitor rises slightly in September
RIVERWOODS, Ill., Oct 04, 2007 (BUSINESS WIRE) -- The Discover(R) U.S. Spending Monitor(sm) rose slightly in
September as consumers reported having more money left over after
paying debts and less concern about unexpected expenses or shortfalls
in income. The Monitor stood at 95.9 for the month compared to the
August level of 94.8. Noticeably unchanged from a month ago was the
lower level of economic and personal financial confidence registered
by the 14,000 consumers who participated in this month's survey.
Spending confidence reached its low point in mid-August, but since
then a steadier, somewhat more upbeat view has emerged. On a week to
week basis, the Monitor is five points higher now than the low point
in August and three points higher than it was the week ending
September 5. Weekly readings topped 97 the week ending September 26 as
consumers continue to be confident in maintaining spending.
Consumers Show a "Steady As We Go" Approach Towards Spending
Nearly 54 percent - the largest since surveying began in May - now
say they intend to spend the same amounts of money in the month ahead.
That's up nearly nine points from May. But during the same five month
period, 28 percent fewer Americans now claim they intend to spend more
next month. In May's first Monitor survey, 40 percent of respondents
said they would spend more in the month ahead. This number has eroded
steadily to 29 percent in September.
"Consumers appear to be showing a 'steady as we go' approach
towards spending," said Margo Georgiadis, executive vice president and
chief marketing officer of Discover Financial Services. "More
consumers plan to spend the same in October versus September. The only
sign of spending caution is the continued downward trend in spending
more. Consumers willing to spend more dropped 25 percent over the last
five months. Whether this trend continues as the holiday shopping
season nears remains to be seen."
One statistical support for maintaining spending is the declining
number of consumers expecting an added expense or shortfall of income
over the next thirty days. The number dropped to 35 percent in
September, down from 38 percent in August and the lowest number since
the Monitor's inception. Although higher than the Monitor average,
married people with children showed the biggest decline in the added
expense/shortfall of income category dropping to 42 percent in
September versus 46 percent in August.
Consumers Trim Household Expenses; Maintain Spending on
Discretionary Expenses and Household Improvements;
A factor that may have been affecting spending confidence in
September is the decreasing pressure that household expenses like
groceries, gas and utilities are having on consumers' budgets. In
September, over 35 percent of consumers said they would spend more on
such expenses next month compared to over 37 percent in August. The
change was reflected in an over 1 point increase in those saying they
would spend less and a just over 1 point increase in those saying that
they would spend the same.
At the same time, consumers are increasingly maintaining their
spending on discretionary personal expenses for items like travel,
entertainment and education. Just over 45 percent say they expect to
spend the same on such expenses next month compared to just over 41
percent in August. But consumers showed less desire to reduce spending
in September. Forty percent said they would spend less on
discretionary personal expenses, down from 43 percent in August.
"The good news for consumers is that household expenses appear to
be having less of an impact this month on their budgets, allowing them
to feel more comfortable in maintaining their discretionary spending,"
said Georgiadis. "The numbers show reluctance from consumers to spend
more in these categories, but they are not cutting back, either."
More consumers said they were planning on maintaining spending on
household improvements and savings and investments as well. Thirty-six
percent said they are expecting to spend the same on household
improvement expenses next month, a two point increase from August.
Fifty-two percent said they would put the same amount of money into
savings next month, up from 51 percent in August.
More Consumers Feeling Confident About Their Budgets Ahead
The amount of consumers managing their budgets to have money left
over has been trending upwards since June. The number has risen from
49 percent to just over 52 percent in September. The high was 55
percent reported in May.
"There has been a steady climb since June in the number of
consumers who say they have money left over after paying their bills
... and fully 80 percent of those who do have money left over say they
will have the same or more left than the previous month," said
Georgiadis. "Having money left over affects spending confidence and if
this trend continues, consumers may be more likely to increase their
Consumers Still Far More Confident in Personal Finances than
Consumers continue to view their personal finances better than
they do the economy. Forty-one percent rated their personal finances
as good or excellent, unchanged from last month while 19 percent rated
their finances as poor. The number of people who said their finances
were the same or getting better was also unchanged at 56 percent.
Forty-two percent said they were getting worse, a 1 point decrease.
Only 18 percent of those surveyed for the September Monitor think
that economic conditions in the country are getting better, the lowest
level the Monitor has reported. One-third of consumers (32 percent)
rated the economy as good or excellent in September. That's down from
35 percent in the baseline month of May 2007. But consumers' views
towards the economy did not worsen in September, as 57 percent view
the economy as fair or poor and 62 percent feel the economy is getting
worse. Both these numbers are unchanged from August.
About the Discover US Spending Monitor
The Discover US Spending Monitor released monthly, queried nearly
15,000 adult consumers in August 2007 about spending intentions and
capacity. The survey also asked for opinions on the U.S. economy and
ratings of personal finances. The survey was conducted by Rasmussen
Reports, LLC, an independent survey research firm
(www.rasmussenreports.com). It has a margin of error of +/- 1 percent.
About Discover Financial Services
Discover Financial Services (NYSE: DFS) operates the Discover Card
with more than 50 million cardmembers, the Discover Network with
millions of merchant and cash access locations, and the Goldfish
credit card business in the United Kingdom. Discover Financial
Services also operates the PULSE ATM/debit network, which serves more
than 4,400 financial institutions and includes nearly 260,000 ATMs, as
well as POS terminals, nationwide. For more information, visit
SOURCE: Discover Financial Services
Discover Financial Services