Discover® U.S. Spending MonitorSM Falls Below 80 for First Time
10 Dicembre 2008 - 12:00PM
Business Wire
The Discover U.S. Spending Monitor slipped to 79.7 in November,
falling below 80 for the first time in its history, as consumer
economic sentiment fell to a record low and concern over personal
finances reached record highs. Heading into the holiday season,
consumers temporarily reversed course on spending from previous
months, with an increasing number planning on spending more in
December. But the results of nightly surveys of random consumers
during November painted a dark picture for retail activity at the
onset of the important holiday shopping season. Continued concerns
over the economy and personal finances have many more consumers
preparing to spend less on holiday shopping than they did last
year. Record Number of Consumers Give the Economy Poor Marks
Sixty-four percent of consumers rated current economic conditions
as poor, a record high and a near 30-point increase from a year
ago. Consumers did shift their views somewhat on their outlook for
the economy with 69 percent saying things were getting worse,
3-points below October�s reading. For the second consecutive month,
not a single income group appeared to be immune from the pessimism
inflicted by current economic conditions. More than 60 percent of
consumers in all three income groups polled (under 40k, 40k-75k,
over 75k) rated the economy as poor. �It is worth noting that
virtually every demographic segment covered by the Monitor is
feeling the impact of the crisis in the country�s financial
affairs,� said Margo Georgiadis, executive vice president and chief
marketing officer for Discover Financial Services. �Americans at
every income level and age, married or not, with kids or not,
appear to be unified in their view of the economy: it�s poor.� As
pessimism has worsened, economic conditions appear to be taking a
toll on consumers� personal finances. A record high 62 percent of
consumers rated their finances as fair or poor in November and 56
percent reported that their finances were getting worse, which is
also a record high. Despite increasing concern over their finances,
a majority (51 percent) of consumers continue to have money left
over after paying the monthly bills. This is the eighth consecutive
month this number has been over 50 percent. But of those who do
have money left over, the number saying they will have the same or
more money left over dropped to 77 percent, nearly two points below
October�s number and the first drop we have seen in five months.
Furthermore, the number of consumers expecting an income shortfall
or added expense in the coming month increased for the first time
in five months to 40 percent. One reason for the expected added
expense and drop in money left over may be that an increasing
number of consumers are planning on spending more in December. From
October to November, the number of consumers expecting to spend
more in the month ahead increased 7 points to 34 percent.
Anticipated holiday spending may have something to do with the
increase, but when comparing numbers to 2007, there is actually
double the number of consumers planning to spend less in December
than there were last year. This comes as consumers expect household
expenses to decline, hitting a 14-month low. Consumers Reluctant to
Increase Discretionary Spending Despite 4-Year Low in Gas Prices
The Monitor reported that 35 percent of consumers expected to pay
more in household expenses in December. This number is 23 points
below what was reported in November 2007, but despite the drop
(Gasoline prices have fallen to levels not seen since 2004),
consumers are reluctant to increase their discretionary spending.
From October to November discretionary spending, like going out to
dinner or spending on a vacation, edged up only slightly. But when
compared to November 2007, the number of consumers planning to
spend less on discretionary purchases is up 7 points. Some other
numbers include: Fifty-two percent planning to spend less on
discretionary purchases like going out to dinner or the movies, up
seven from November 2007 Fifty-two percent planning on spending
less on home improvement purchases, up seven points from November
2007 Nearly 50 percent (49%) planning on spending less on major
personal purchases like travel or a gym membership, up 7 points
from November 2007 �Even though consumers are far less burdened by
household expenses than they were a year ago, a majority of them
are actively spending less in all discretionary categories,� said
Georgiadis. �Poor economic conditions and concerns over personal
finances have ruled out any possible spending increases for most
consumers.� Consumers Planning to Spend Less This Holiday Season
and Shopping Earlier The restraint consumers have applied towards
their spending also is reflected in their holiday spending
intentions. The numbers show: Sixty-three percent plan on spending
less this holiday season, an 11-point increase from 2007 (52
percent). Nine percent plan on spending more this holiday season,
7-points lower than November 2007 (16 percent). Consumers also seem
to be taking advantage of holiday sales a little earlier this year.
November numbers showed that 42 percent of consumers have at least
begun their holiday shopping. This compares to 39 percent who said
the same thing in Nov. 2007. �Consumers have approached holiday
spending this season with far more caution,� said Georgiadis. �This
is not good news for retailers who rely on holiday spending for the
bulk of their profits.� 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� U.S. Spending MonitorSM is a
monthly index of consumer spending intentions and capacity that is
based on interviews with a random sample of 15,000 U.S. adults
conducted at a rate of 500 per night. In addition to spending, the
survey asks consumers their opinions on the U.S. economy and on
their personal finances. Weekly reports reflect calculations for
the seven previous days of interviews, or a sample of 3,500 adults.
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). About Discover Financial Services
Discover Financial Services (NYSE: DFS) is a leading credit card
issuer and electronic payment services company with one of the most
recognized brands in U.S. financial services. The company operates
the Discover Card, America's cash rewards pioneer. Since its
inception in 1986, the company has become one of the largest card
issuers in the United States. Its payments businesses consist of
the 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 185 countries and territories. For more information,
visit www.discoverfinancial.com.
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