Mixed Views from Consumers as More Feel Economic Conditions are Improving, but Nearly 1/4 Rate Their Finances as Poor
RIVERWOODS, Ill., Sep 01, 2010 (BUSINESS WIRE) -- More consumers feel the economy is getting better, but the number of consumers rating their personal finances as poor reached a six-month high in August according to the Discover U.S. Spending Monitor.
The Monitor, a poll of 8,200 consumers tracking consumer confidence and spending intentions on a daily basis, was flat in August, dropping just 0.3 points to 86.2. Overall, 27 percent of consumers feel economic conditions are improving, a 4-point increase from July. But improving economic views were offset by nearly a quarter, 24 percent, of consumers rating their personal finances as poor, a 3-point rise from July. The mixed views consumers showed toward the economy and their finances may have factored in to the little change the Monitor reported in consumer spending behavior in August.
Consumers' Spending Intentions Remain Unchanged Month-to-Month
Only 19 percent of consumers said they plan to spend more in the next 30 days, unchanged from July, while 25 percent planned to spend less, just 1 point lower than July. Monitor data also showed little change in the number of consumers planning to reduce discretionary spending in the following areas:
- 48 percent plan to spend less on going out to dinner or the movies, unchanged from July
- 48 percent plan to spend less on home improvements, unchanged from July
- 45 percent plan to spend less on a vacation or gym membership, 1 point lower than July
"Financial uncertainty has consumers pretty much adopting a hold-the-line attitude toward their spending," said Julie Loeger, senior vice president of brand and product management for Discover. "The good news is that for the first time in four months, the Monitor reported an increase in consumers who feel economic conditions are improving. If consumers continue to feel the economy is on the mend, it may give them a reason to believe their financial situation will improve as well."
57% rate the Economy as Poor, Financial Concerns Remain
There was little change in consumer attitudes regarding the current state of the economy. Fifty-seven percent rate current economic conditions as poor. While there was an increase in consumers who feel economic conditions were improving, it had no effect on their financial attitudes. Forty-eight percent feel their personal finances are getting worse, a 6-month high.
42% Have No Money Left Over After Paying Monthly Bills
The financial pessimism consumers showed in August may have to do with the fact that 42 percent of those surveyed have no money left over after paying monthly bills, a 3-point rise from July. Only 47 percent said they would have money left over, a 2-point decline and the first drop in six months.
However, 81 percent of those who do have money left over after paying monthly bills planned on having the same or more money left over than the previous month, 2 points higher than July.
Only 37 percent said they were expecting an income shortfall or added expense in the next 30 days, unchanged from July.
For more Discover U.S. Spending Monitor survey data, charts and information, please visit http://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 (http://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 http://www.discoverfinancial.com.
SOURCE: Discover Financial Services