Younger Consumers Lead Rebound in Confidence, Discretionary
Spending Intentions Climb for Third Straight Month
RIVERWOODS, Ill., May 05, 2010 (BUSINESS WIRE) --Consumer confidence rebounded in April, fueled by a distinct change of
heart among 18- to 39-year-olds about the state of the U.S. economy,
according to the Discover U.S. Spending Monitor.
The Monitor - a poll of 8,200 consumers that tracks consumer confidence
and spending intentions on a daily basis - jumped 5.5 points in April to
91.5 (based out of 100), the highest the Monitor's index has been since
November 2007. Overall, 34 percent, the most ever, believe economic
conditions are improving.
Confidence Climbs Among 18-to 39-Year-Olds
Forty-five percent of younger consumers rated the economy as poor, a
decline of 13 points from the previous month. By comparison, older
consumers who rated the economy as poor declined only three points.
The number of younger consumers who felt economic conditions were
worsening declined 9 points to 40 percent.
Younger consumers showed the most improvement in terms of anticipated
income shortfall: 40 percent said they expected an income shortfall in
the month ahead, a 3-point decline from March.
Those consumers ages 18 to 39 who felt their personal finances were
getting worse declined 6 points from the previous month to 40 percent.
26 percent felt their finances were getting better in April, which
tracked higher than the average of 23 percent.
"Consumers, especially those below the age of 40, are feeling better
about the economy and less pessimistic about their finances," said Julie
Loeger, senior vice president of brand and product management for
Discover. "Hopefully, the growing economic and financial confidence of
younger consumers continues, and ultimately helps improve the confidence
among all Americans."
Plans to Increase Discretionary Spending Rises for Third Straight
Month, but Overall Spending Remains Flat
The more optimistic economic and financial attitudes were coupled with a
continuing positive trend toward discretionary spending intent. For the
third straight month, the Monitor reported an increase in the number of
consumers planning to spend more on discretionary purchases, while an
unchanged 57 percent of consumers are planning to keep their overall
spending flat in the month ahead.
Overall, 11 percent of consumers said they would spend more on
discretionary items, hitting double-digits for only the third time in 12
months. In April, consumers said they planned to increase spending in
the following categories:
Home remodeling or new appliances (increased from 14 percent to 18
Vacations or furthering their education (increased from 12 percent to
Sporting events, restaurants or hobbies (increased from 8 percent to
Fewer Consumers Rate the Economy as Poor, but Less Than Half Have
Money Remaining After Paying Monthly Bills
Half of consumers rated the economy as poor in April, a 7-point decrease
A Monitor-high 23 percent of consumers felt their finances were getting
better in April, 2 points higher than March. Overall, 44 percent felt
their finances were getting worse, a 4-point decline from the previous
Despite rising consumer confidence, for the 13th straight month,
consumers with money left after paying monthly bills were in the
minority. But of the 46 percent who had money left over, 82 percent
expect to have the same or more money remaining than the previous month
after paying monthly expenses.
After hitting 39 percent in March, there was a 2-point decline to 37
percent in the number of consumers expecting an income shortfall in the
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(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