Consumer Spending Intentions Are Flat Despite Improving Financial Confidence
RIVERWOODS, Ill., Feb 03, 2010 (BUSINESS WIRE) -- The Discover U.S. Spending Monitor rose 2.2 points in January to 85.2
(based out of 100), primarily driven by an increase in the number of
consumers feeling better about their personal finances. Despite
improving views about their finances, a majority of consumers continue
to rate the economy as poor and nearly half don't see economic
conditions improving. As a result, consumer spending intentions were
flat in January.
Overall, 56 percent of consumers rate the economy as poor, a point lower
than December. But 49 percent felt economic conditions were getting
worse, a point higher than December.
Majority of Consumers Planning to Hold the Line on Spending
Consumers appear content with the spending cutbacks they made
post-holidays. Fifty-three percent expect to spend the same in February
as they did in January. This was a 9-point increase from last month's
Monitor. But discretionary purchases like going out to the movies or
restaurants, and major purchases like a vacation are still being cut by
a majority of consumers. Fifty-four percent plan on spending less on
discretionary personal purchases, a point increase from December.
Fifty-two percent anticipate spending less on major personal purchases,
also a point increase. There was no change in home improvement spending
intentions month-over-month, and 54 percent of consumers say they will
spend the same on household expenses like gas and groceries during the
month ahead, a 3-point increase.
"Consumers appear to be holding steady on their spending patterns," said
Julie Loeger, senior vice president of brand and product management for
Discover. "The economy remains a concern to them and they are likely to
be conservative with spending until there are signs that the economy is
More Consumers Feel Better About Their Personal Finances
Economic pessimism did not appear to affect consumers' views about their
personal finances in January, as more felt their personal finances were
improving. Overall, 34 percent rated their personal finances as good or
excellent, a 3-point increase from December and a 9-month high.
Furthermore, 22 percent felt their personal finances were getting
better, also a 3-point increase from December and a 17-month high.
Twenty-four percent currently rate their personal finances as poor and
47 percent feel their finances are getting worse.
Increase in Number of Consumers Having Money Left Over After Paying
There were also some positive indicators in January's Monitor in terms
of consumers better managing their budgets. While still less than a
majority, 47 percent of consumers expect to have money left over after
paying the monthly bills. This was a 3-point increase from last month's
Monitor low. Of those who do have money left over, 81 percent planned on
having the same or more money remaining than the previous month, an
8-point increase from December and a 9-month high.
The number of consumers expecting an added expense or income shortfall
in the month ahead fell in January. Only 38 percent were expecting an
added expense or income shortfall, the first time this number has
dropped below 40 percent since September.
"With consumers holding the line on spending, they are better able to
pay off their monthly bills," said Loeger. "This has allowed them to
grow more confident about their personal finances. Hopefully, this will
continue in the months ahead."
About Discover U.S. Spending Monitor
The Discover(R) 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 direct banking and 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 personal and
student loans, online savings accounts, certificates of deposit and
money market accounts through its Discover
Bank subsidiary. Its payment 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 more than 185 countries and
territories. For more information, visit www.discoverfinancial.com.
SOURCE: Discover Financial Services