Consumer Spending Confidence Rebounds in July
07 Agosto 2007 - 3:48PM
Business Wire
Consumer spending confidence rebounded slightly in July, according
to a random survey of 15,000 US adults conducted last month for the
Discover� Consumer Spending Confidence MonitorSM. For the first
time since the Monitor started in May, more than 50 percent of
consumers are not expecting income shortfalls this month. A modest
rebound in the number of consumers saying they had money left over
after paying July�s bills and a general increase in economic
optimism helped drive a 0.5 point increase in the July Monitor to
97.2 from 96.7 in June. July marks the first time that the Discover
Consumer Spending Confidence Monitor of 15,000 adults has been
expressed as a numeric value or index. The Monitor is based upon
consumer responses to nine questions on spending intent, capacity
and economic confidence. The responses are scaled and averaged
using conventional indexing methodology. The index baseline of 100
was established using data from the inaugural Monitor survey in May
2007. Consumers� views of their personal finances edged up slightly
in July as 31 percent said their personal finances were improving
versus 30 percent in June. Likewise, 27 percent of the adults
surveyed in July said the economy was poor compared to 28 percent
in June. Consumers Maintaining Their Spending with Confidence, Not
Likely to Increase Their Spending The number of consumers who said
they would spend the same next month went up to 51 percent in July
compared to 49 percent in June. In addition, in July one consumer
in three (33 percent) said they would spend more next month,
virtually the same as last month. �The data suggests that consumers
are doing a good job of managing their budgets,� said Ed Stolbof,
senior vice president of marketing for Discover Financial Services.
�Half (50 percent) of consumers said they had money left over after
paying the bills. Successfully managing their budgets to have money
left over may be a reason behind consumers� confidence in
maintaining their spending. But concerns about the economy, (63
percent view the economy as fair or poor) may keep them from
increasing their spending next month.� The July data also showed no
appreciable change in the number of people who say they are
vulnerable to sudden losses of income. Twenty-nine percent say they
could not maintain their lifestyle for more than 30 days before
replacing lost income. Younger Adults Increasingly Managing Their
Budgets to Have Money Left Over, Less are Vulnerable to Sudden
Income Loss The survey revealed that 50 percent of consumers had
money left over after paying last month�s bills, up from 49 percent
in June. Consumers expect this budget surplus to continue with 79
percent of those with a surplus planning to have the same or more
money left over after paying July expenses. The July data shows
marked changes in scores for 18 to 29-year-olds when it comes to
spending. There was a 6 percent increase to 45 percent in the
number of younger consumers who said they would have money left
over after paying their monthly bills and a 4 percent decline to 44
percent who claim they will have no money left over. The 18 to
29-year-olds saying they expected added expenses or shortfalls in
income fell from 48 percent to 44 percent; and the number expecting
no shortfalls rose from 38 percent to 44 percent. �The summer
season has brought an increase in optimism among consumers 18 to 29
years old,� said Stolbof. �Our survey shows an increasing amount of
younger adults having money left over after paying their bills and
that is boosting their spending confidence.� The biggest change in
the segment�s opinions came in connection with their attitudes
about continuing their lifestyles in the event of a sudden loss of
income. In June, 45 percent said they couldn�t go for more than a
month without replenishing their source of income. That percentage
dropped seven points in July to 38 percent. Confidence in the
Economy, Personal Finances Increases Among Younger Adults While the
overall view of the economy remained the same as last month�s
survey with 35 percent rating it as good or excellent, younger
adults (18-29) showed less pessimism about the economy as 67
percent rated the economy fair or poor compared to 71 percent in
June. Twenty-nine percent of younger adults feel the economy is
good or excellent versus only 27 percent in June. There also were
improvements among younger adults in attitudes about their personal
finances as those who said their finances were improving jumped
four points to 35 percent. This is well above the overall average
of 31 percent. Younger adults who said their personal finances were
getting worse fell three points to 41 percent, the same as the
overall average. About the Discover Consumer Spending Confidence
Monitor The Discover Consumer Spending Confidence Monitor, released
monthly, queried nearly 15,000 adult consumers in July 2007 about
spending intentions and capacity. The survey also asked for
opinions on the U.S. economy and ratings of personal finances. The
survey was conducted by Rasmussen Reports, LLC, an independent
survey research firm (www.rasmussenreports.com). It has a margin of
error of +/- 1 percent. About Discover Financial Services: Discover
Financial Services (NYSE: DFS) operates the Discover Card with more
than 50 million cardmembers, the Discover Network with millions of
merchant and cash access locations, and the Goldfish credit card
business in the United Kingdom. Discover Financial Services also
operates the PULSE ATM/debit network, which serves more than 4,400
financial institutions and includes nearly 260,000 ATMs, as well as
POS terminals, nationwide. For more information, visit
www.discoverfinancial.com.
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