Confidence in the Economy Reaches Monitor High, But Consumer
Spending Intentions Remain Flat
RIVERWOODS, Ill.--(BUSINESS WIRE)--Oct. 7, 2009--
The Discover U.S. Spending Monitor rose for the second straight month,
climbing 2 points in September to 89 (based out of 100). The rise in the
Monitor’s index is mostly attributed to improved economic sentiment in
September. In all, 33 percent of U.S. consumers feel economic conditions
are improving, a Monitor high and 2-point increase from August. In
September, consumers felt a little better about their personal finances
as well. Thirty-three percent rated their finances as good, or
excellent, the highest in four months and up a point from August.
Despite a Monitor high in economic sentiment, consumer spending
intentions remained flat in September, a cause for concern for retailers
who are hoping consumers will increase their spending as we approach the
More Consumers Expecting to Spend the Same Next Month
Only 19 percent expect to spend more in the next 30 days, continuing a
4-month decline and down a point from August. Fifty-four percent said
they planned on spending the same amount, up 2 points.
More consumers are expecting to spend the same next month on
discretionary spending as well. Thirty-nine percent of consumers planned
on spending the same amount of money on going out to dinner, or the
movies in the month ahead, a 21-month high and 2-point increase from
August. About 32 percent plan to spend the same on home improvements, a
high not reached since February 2008. Thirty-six percent plan on
spending the same on major personal purchases over the next 30 days, a
12-month high. Half of consumers are also planning on saving and
investing at the same rate over the next 30 days, a 2-point increase
from last month.
“After months of cutbacks, consumer spending intentions appear to be
leveling off, a sign that they are content with the spending cutbacks
they made,” said Julie Loeger, senior vice president of brand and
product management for Discover. “A cause for concern is there appears
to be no indication consumers are willing to increase their spending,
despite a Monitor-high number of them who feel the economy is getting
Compared to a year ago, just 12 percent of consumers felt the economy
was getting better, yet 10 percent still expected to spend more on
discretionary purchases in the month ahead. Today, only 8 percent are
expecting to spend more on discretionary purchases despite 33 percent
feeling the economy is getting better.
Six Straight Months where Less than Half of Consumers Have Money Left
A discouraging trend continued in September, when for the sixth straight
month, less than half of consumers expected to have money left over
after paying monthly bills. Only 47 percent expected some extra cash, a
point increase from August. However, of those who expect to have money
left over, 80 percent said they would have the same or more money left
over than the previous month, a high not reached since April.
Furthermore, only 38 percent were expecting an added expense or income
shortfall in the next 30 days, a 2-point decrease from August and the
lowest since April.
Monitor-Low 43 Percent of Consumers Feel Economic Conditions are
Over half, 52 percent, currently rate the economy as poor, a 13-month
low and down 3 points from August. Only 43 percent of consumers feel
economic conditions are getting worse, also a Monitor low and 3 points
lower than last month.
While consumers showed improved economic sentiment, they were not as
optimistic about their financial outlook. Thirty-three percent currently
rate their finances as good or excellent, a 1-point increase from last
month. But there was an increase of a point to 48 percent who feel their
finances are getting worse.
“Consumers definitely feel economic conditions are getting better, but
over half still rate current economic conditions as poor,” said Loeger.
“Combine that with uncertainty as to where their personal finances are
headed and you can see why consumers are still very cautious with their
spending intentions. Unfortunately, the Monitor is showing no signs that
consumer attitudes may change as we head into the holiday shopping
For more Discover U.S. Spending Monitor survey data, charts and
information, please visit www.discoverfinancial.com/surveys/spending.shtml.
About Discover U.S. Spending Monitor
The Discover® U.S. Spending MonitorSM is a monthly
index of consumer spending intentions and capacity that is based on
interviews with a random sample of 8,200 U.S. adults conducted at a rate
of 275 per night. In addition to spending, the survey asks consumers
their opinions on the U.S. economy and their personal finances. The
Monitor began in May 2007 with a base index of 100. Surveys are
conducted by Rasmussen Reports, an independent survey research firm (www.rasmussenreports.com).
Discover Financial Services (NYSE: DFS) is a leading credit card issuer
and electronic payment services company with one of the most recognized
brands in U.S. financial services. Since its inception in 1986, the
company has become one of the largest card issuers in the United States.
The company operates the Discover card, America's cash rewards pioneer,
and offers student and personal loans, as well as savings products such
as certificates of deposit and money market accounts. Its payments
businesses consist of Discover Network, with millions of merchant and
cash access locations; PULSE, one of the nation's leading ATM/debit
networks; and Diners Club International, a global payments network with
acceptance in 185 countries and territories. For more information, visit www.discoverfinancial.com.
Source: Discover Financial Services