Discover® U.S. Spending MonitorSM Falls 4.3 Points in December
05 Gennaio 2011 - 1:00PM
Business Wire
After reaching a 3-year high in November, consumer confidence
slid in December, as more Americans rated current economic
conditions and the state of their personal finances as poor,
according to the Discover U.S. Spending Monitor.
The Monitor, a poll of 8,200 consumers tracking confidence and
spending intentions on a daily basis, gave back the gains it made
in November, dropping 4.3 points to 87.5. Fifty-six percent of
consumers currently rate the economy as poor, a 2–point increase
from November. Only 29 percent of consumers feel economic
conditions are getting better, down 2 points from November.
Consumers also soured on their personal finances in December.
Twenty-six percent, the most since December 2009, rated their
finances as poor, up 3 points from November. More consumers also
feel their finances are getting worse; 46 percent say their
finances are getting worse, up a point from the previous month.
While views of current economic conditions and personal finances
this month drove the index downward, some of that movement can be
explained by January spending intentions. Thirty-three percent of
consumers say they expect to spend less in January, compared to
18.5 percent who said so in November, as the country headed into
the holiday spending season.
“We typically see a big drop in spending intentions for the
month of January, as the holidays conclude and consumers tighten
their belts,” said Julie Loeger, senior vice president of brand and
product management for Discover. “However, there’s no question that
views on the state of the economy soured a bit this month.”
Holiday Spending Intentions up 4 Points from a Year Ago, but
High Gas Prices May Have Prevented Bigger Increase
In December 2009, only 10 percent of consumers were planning to
spend more on holiday gifts than the previous year. In 2010, this
number rose to 14 percent. Furthermore, only 57 percent planned on
spending less on holiday gifts this year, 7 points lower than in
2009.
But high gas prices may have prevented more consumers from
increasing their holiday spending. In polling done over the final
two weeks of December, the Monitor reported that 47 percent of
consumers spent less on gifts this year due to the high cost of
gasoline. Forty-three percent said high gas prices did not affect
how much they spent on gifts.
Post-Holiday Spending: Consumers Planning Discretionary
Cutbacks
Heading into January, more consumers are planning to trim their
discretionary expenses, not unexpected, as the Monitor reported
similar increases during this time since its inception three years
ago.
But compared to a year ago, fewer consumers are planning to cut
discretionary spending heading into January in the following
areas:
- Going out to dinner or the movies:
52 percent plan to spend less next month, one point lower than
2009.
- Home improvements: 50 percent plan
to spend less, down 3 points from 2009.
- Vacation or gym membership: 48
percent plan to spend less, down 3 points from 2009
The fact that fewer consumers are planning to trim their
discretionary spending compared to a year ago is in contrast to the
significant post-holiday spending cuts the Monitor reported that
consumers made in 2008 and 2009.
Only 46% Have Money Left Over After Paying Monthly
Bills
Holiday spending may have played a role in the drop in the
number of consumers having money left over after paying monthly
bills. In December, just 46 percent reported having money left
over, 3 points lower than November. December marked the 21st
consecutive month this number has been below 50 percent.
Seventy-three 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, a 7-point drop that more than likely
is attributed to holiday spending. The Monitor reported a similar
drop in 2009.
However, 42 percent of consumers are expecting an income
shortfall in the month ahead, an increase of 2 points from the
previous month and the same number reported in December 2009.
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 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 (www.rasmussenreports.com).
About Discover
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 www.discoverfinancial.com.
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