Discretionary Spending Intentions Hold Steady
More Consumers are Planning to Tighten their Holiday Spending Budgets This Year Compared to Last Year
RIVERWOODS, Ill., Nov 02, 2011 (BUSINESS WIRE) -- Consumer confidence slightly rebounded in October as more consumers felt the economy and their personal finances were improving, while fewer felt the economy and their finances were getting worse according to the Discover U.S. Spending Monitor.
The Monitor, a 4-year-old daily poll tracking economic confidence and spending intentions of nearly 8,200 consumers throughout the month, recorded a 2-point rise to 79.0 percent. Fourteen percent of consumers felt economic conditions were getting better in October, a 2-point rise from September. Sixty-two percent felt economic conditions were getting worse, down 1 point from September.
Despite the fact that more consumers feel economic conditions are improving, a record 69 percent view the current state of the economy as poor. This is 2 points higher than last month and 12 points higher than a year ago. October's findings indicate:
Attitudes Toward Personal Finances Improve
Consumer sentiment toward personal finances also rebounded slightly in October.
- 16 percent of consumers felt their personal finances were getting better in October, 1 point higher than September. Fifty-five percent of consumers felt their finances were getting worse, 2 points lower than September.
- 30 percent rate their personal finances as good or excellent, 1 point higher than September. Twenty-six percent of consumers rated their personal finances as poor, slightly less than September's record high of 28 percent.
- 45 percent of consumers said they will have money left over after paying monthly bills, up 2 points from September. Forty-two percent said they will have no money left over, down 2 points from September.
Discretionary Spending Intentions Are Flat Heading Into the Holiday Season
October's Monitor indicated consumers were content with the discretionary spending cutbacks they made in September and are more likely to spend the same in the month ahead as they did in the prior month rather than more or less.
- 37 percent planned to spend the same on discretionary personal purchases like going out to dinner or the movies, a figure that is up 2 points from the month earlier. Half planned on spending less, down 3 points. Only 8 percent planned on spending more, down 1 point.
- 30 percent of consumers planned on spending the same in the month ahead on home improvement purchases, the same as last month's survey. At the same time, 52 percent plan on spending less, also the same as last month's survey, while 13 percent plan on spending more on home improvement purchases, also the same figure as September.
- 36 percent planned on spending the same on major purchases like a vacation, up 3 points from September. Forty-nine percent planned on spending less, down 3 points from the prior month. A total of 11 percent plan on spending more, the same as September.
More Consumers Are Planning to Spend Less on Holiday Gifts in 2011 Compared to 2010
Early indications suggest that more consumers are heading into the holiday season planning to spend less on holiday gifts compared to 2010. Sixty-one percent of consumers, so far, say they plan on spending less this year on holiday gifts than they did last year, 6 points higher than what was reported in the Monitor in 2010. Only 9 percent plan on spending more on holiday gifts this year, compared to 11 percent in 2010.
In years past, Monitor data has shown that the percentage of consumers intending to spend less on holiday gifts than the year before steadily decreases from the start to the end of the holiday season. The Monitor will continue to ask consumers their holiday spending intentions through Christmas.
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