Discover® U.S. Spending MonitorSM Consumer Confidence Volatile Throughout April but Remains at 89.4
04 Maggio 2011 - 1:00PM
Business Wire
Consumer confidence in April started out unpredictable and
turbulent, yet by the end of the month, remained at nearly the same
levels as March. According to the Discover U.S. Spending Monitor, a
daily poll of 8,200 consumers tracking economic confidence and
spending intentions throughout the month, consumer sentiment
remained nearly unchanged month-over-month, dropping only one-tenth
of a point to 89.4 in April. That change varied greatly, however,
throughout the month.
From April 6 to April 20 there was a near 10-point increase in
consumers who felt the economy was worsening, from 46 percent to 56
percent. During the same period, there was a rise in the number of
consumers rating their personal finances as poor, from 20 to
28 percent, and a similar rise in the number of people who said
their finances were getting worse, from 46 to 55 percent. The
precipitous declines in confidence came as Standard & Poor’s
declared concern about the nation's debt ratings, as well as
continued increases in gas prices.
By the end of the month, negative sentiment had declined
somewhat. On average, the number of Americans in April who felt
that economic conditions are getting worse was 51 percent, nearly
unchanged compared to March. Eighteen percent of consumers feel
conditions are the same, down 2 points from the previous month,
while 26 percent feel the economy is improving, a 1-point increase
from March.
At the same time, April’s responses continue to highlight
consumers’ doubts about their personal finances. Just 34 percent
rate their finances as good or excellent, while 64 percent say
their finances are fair or poor. When asked if their finances were
getting better or worse, 49 percent feel their finances are
worsening, up 1 point from March. Twenty-one percent say their
finances are improving, a 1-point decrease from the previous
month.
“Skyrocketing gas prices are affecting consumer attitudes about
the economy and their personal finances, particularly since the job
market is lagging,” said Julie Loeger, senior vice president of
brand and product management for Discover. “While sentiments
improved somewhat by month’s end, gas prices are still on the rise,
making it less likely that consumer confidence will rebound in
May.”
Gas Prices May Spoil Summer Travel Plans, Especially for
Families
To better understand the effects of fuel costs on discretionary
spending, the Monitor asked consumers about the impact of rising
pump prices. Fifty-seven percent say fuel costs are making them
change their summer vacation plans, while 68 percent of consumers
say higher gas prices are forcing them to cut back
on discretionary spending.
The respondents most committed to cutting back are those
with children at home: 80 percent of consumers with kids are
cutting back on discretionary spending and 64 percent are changing
vacation plans because of high gas prices.
Majority of Consumers Spending More on Gas, Groceries;
Cutting Most Discretionary Spending
The Monitor reports that consumers continue to show signs of
off-setting high prices at the pump with cuts in discretionary
spending. Overall, 37 percent of consumers expect to spend more in
the month ahead, up 4 points since March and a total of 14 points
since January. Seventeen percent of consumers expect to spend less,
down 1 point from March, and 44 percent expect to spend the same,
down 3 points from the previous month.
As with March, a majority of consumers, 56 percent, plan to
spend more on gas, groceries and their mortgages. This is up 1
point from the previous month. Thirty-four percent of consumers
expect to spend the same on household expenses, down 1 point from
March, while 8 percent plan to spend less, unchanged from the
previous month.
Consumers are offsetting the rising costs of household
expenditures by reducing spending in the following areas:
- Entertainment: Fifty-two percent of
consumers expect to spend less in the next month on going out to
dinner, movies or sporting events, down 1 point from last month.
Thirty-six percent expect to spend the same, up 1 point from March,
while 8 percent plan to spend more, down 1 point from the previous
month.
- Travel and Memberships: Forty-nine
percent expect to spend less on a vacation or health club
membership, up 1 point from last month. Thirty-four percent expect
to spend the same, down 1 point from March, while 13 percent plan
to spend more, a 1-point increase from last month.
A bright spot in consumer discretionary spending may be home
improvement. Sixteen percent of consumers plan to increase spending
on household improvements, a 2-point increase from the month
before. Twenty-nine percent expect to spend the same, down 1 point
from last month. And 49 percent of consumers plan to spend less
next month on home improvement purchases, down 1 point from
March.
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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