Discover® U.S. Spending MonitorSM Rises 1.2 Points; First Upturn in Five Months
04 Febbraio 2009 - 12:00PM
Business Wire
The Discover U.S. Spending Monitor rose 1.2 points in January,
mainly due to a slight increase in economic confidence from
consumers. The rise in optimism was largely offset by continued
restraint on spending intentions, as consumers, buffeted by dismal
housing, labor and financial news continue to keep a tight hold on
their purse strings. As a result, the monthly index stood at 77.8
(base = 100), slightly better than the record low 76.6 set in
December.
The January Monitor survey reflected both the uncertainty and
the steadfastness of consumers in the face of the worst financial
news in more than three decades.
Majority of Consumers Still Intending to Cut Discretionary
Spending
The outlook on spending cast a long shadow. For only the second
time in the Monitor�s two-year history, the percentage of Americans
who plan to spend less in the following month, 29 percent, is
greater than the percentage that plan to spend more, 17 percent. In
contrast, these measures were almost the reverse in August 2008,
the month before the financial crisis really took hold. Back then,
15 percent said they would spend less and 32 percent said they
intended to spend more.
No spending category was immune from intended consumer cutbacks.
A near-record 55 percent of Americans were prepared to spend less
on discretionary categories like entertainment, dining out and
movies next month. A majority of people (52 percent) are cutting
back on household improvements and major personal purchases (51
percent) with both measures near their record highs. Finally,
consumers are putting a sharp pencil to household expenses where a
record high 70 percent are either holding the line or spending
less, and a record low 28 percent say they will have to spend more
on household expenses in the coming month.
�The last time the Monitor reported 55 percent of consumers
intending to spend less on discretionary spending, gas prices were
nearing $4 per gallon,� said Julie Loeger, senior vice president of
marketing for Discover Financial Services. �Job losses and a poor
economy have definitely replaced high gas prices as primary drivers
of discretionary cost-cutting.�
Less Than a Majority Have Money Left Over After Paying
Bills
Since September, the Monitor has shown a slow but noticeable
reduction in the number of Americans who have money left over after
paying the monthly bills, from 52 percent to 49 percent today. This
is the first time since February 2008 that less than a majority (49
percent) of consumers have money left over after paying the monthly
bills.
Despite the fact that fewer have money left over, there was some
positive news: Of those who did have money left over, 78 percent
had the same or more left over than the previous month. This was a
6-point jump from December. It is also the first time since October
that less than 40 percent (37 percent) of consumers were expecting
an added expense or an income shortfall in the month ahead.
Consumers Show Slight Improvement in Economic, Financial
Outlook
Perhaps buoyed by the inauguration of the nation�s 44th
president and pledges of an added economic stimulus from the new
administration, consumers were slightly less pessimistic in their
outlook for the economy. While virtually the same number of
consumers rated the economy as poor (64 percent versus 65 percent
in December), there was a 4-point drop from 71 percent to 67
percent in the number of consumers who think the economy is getting
worse.
Twenty-three percent of consumers still rate their finances as
poor, the same as last month, but there was a 2-point decline in
the percentage of consumers who feel their finances are getting
worse (52 percent in January versus 54 percent in December). The
improvement came even though surveys in the last week of the month
began to show sagging confidence.
�These are highly uncertain times for consumers,� said Loeger.
�Consumers are trying to get their budgets under control, and
trimming their expenses. While these moves are helping individual
consumers combat the effects of the recession, they are
unfortunately having an adverse effect on the economy.�
Monitor Rises with Obama Inauguration, Falls on Job Loss
Reports
In the weeks leading up to the presidential inauguration,
consumers reported a spurt in economic confidence, no doubt in
anticipation of the change in administration and a new approach to
the nation�s financial crisis. Had January ended on Inauguration
Day, the Monitor�s Index would have been up more than 3 points.
Even the swearing in of the nation�s first African-American
president and the near certainty that Congress would enact a new
stimulus plan could not stave off the burst of pessimism in the
week following the inauguration.
For the seven days ending Jan. 28, the Monitor dipped more than
3 points. Fueling the decline was a 4-point drop in economic
confidence and a 3-point plunge in the index measuring consumer
spending intentions. The fall coincided with a barrage of
post-inauguration news about job cuts.
For more Discover U.S. Spending Monitor survey data 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. 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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