Heading Into Holidays, Consumer Sentiment About Economy and Finances Improves;
Fewer Consumers Cutting Discretionary Spending Compared to Last Year
RIVERWOODS, Ill., Nov 03, 2010 (BUSINESS WIRE) -- Consumers may be feeling the holiday spirit early, as their increased optimism toward the economy and their personal finances in October led to a rise in the Discover U.S. Spending Monitor for the first time since May.
The Monitor, a poll of 8,200 consumers tracking consumer confidence and spending intentions on a daily basis, rose 1.8 points in October to 87.5. The number of consumers currently rating the economy as poor remained unchanged for the third consecutive month at 57 percent, but for the first time since June, less than a majority of consumers feel that economic conditions are getting worse. Forty-nine percent of consumers feel economic conditions are worsening, down 2 points from September, and those who feel it's getting better increased 1.8 points to 27 percent.
Consumers' outlook on their own finances was also a little better in October. For the first time since May, the number of consumers who feel their personal finances are getting worse dropped. Forty-seven percent feel their finances are deteriorating, down from 49 percent in September.
Fewer Consumers Planning to Cut Discretionary Spending Compared to a Year Ago
While improving economic and financial outlooks are a positive sign approaching the holidays, consumers gave little indication of planning to increase their discretionary spending in the month ahead. Compared to last year however, the number of consumers planning to cut discretionary spending in the month ahead is lower.
Consumers are planning to spend less in November in the following areas:
- Going out to dinner or the movies: 47 percent plan to spend less next month, down one point from September and 5 points from a year ago.
- Home improvements: 49 percent plan to spend less, down one point from September and 3 points from a year ago.
- Vacation or gym membership: 47 percent plan to spend less, down one point from September and 4 points from a year ago.
"Consumers' discretionary spending intentions have basically held steady for most of the year," said Julie Loeger, senior vice president of brand and product management for Discover. "But with significantly fewer consumers planning to cut spending in the month head compared to last year, this may be an encouraging sign for retailers and the approaching holiday season."
No Change in Number of Consumers Having Money Left Over After Paying Monthly Bills
For the 19th consecutive month, less than a majority of consumers have money left over after paying monthly bills. Just 47 percent expected to have money left over, unchanged since August.
However, 80 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. This is the third month in a row this number equaled or topped 80 percent.
Only 37 percent said they were expecting an income shortfall or added expense in the next 30 days, also unchanged since August.
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