Discover U.S. Spending MonitorSM Consumer Confidence Jumps in January

Posted by John B. Frank - ePayment News Wednesday, February 8, 2012


Consumers’ Views About the Economy and Their Finances Are Improving
RIVERWOODS, Ill.--()--Consumer confidence jumped in January, with more consumers saying the general economy and their personal finances are improving. The Discover U.S. Spending Monitor, a 4-year-old daily poll tracking economic confidence and spending intentions of nearly 8,200 consumers throughout the month, recorded a 5.5-point jump from the previous month to 90.5. This is the first time since May 2010 that the index has topped 90.
Nearly 30 percent of consumers felt the overall economy is getting better, a jump of more than 6 percentage points from December and the highest figure in the last year. At the same time, those who reported their personal finances were improving rose nearly 5 percentage points to 23 percent – also the highest figure since February 2011.
The percentage of people who rated the U.S. economy as poor also declined from the previous month, down 2 percentage points to 56 percent. At the same time, the percentage of people who rated the economy as good or excellent exceeded 11 percent, an increase of more than 2 percentage points from the month before and the highest percentage for the Monitor since September 2008.
Views of Personal Finances Improve; More Money Left Over
Consumer sentiment toward their personal finances showed a marked improvement, while more consumers also reported more money left over at the end of the month:
  • Consumers from households of all incomes reported a brightening attitude toward their personal finances, with those from households earning between $40,000 and $75,000 annually seeing the biggest jump in sentiment. Of that group, nearly 27 percent said their personal finances were improving, up more than 7 points from the month before. In comparison, of consumers from households with less than $40,000 in annual income, nearly 15 percent reported they feel more positive about their personal finances, up nearly 4 points from the month before.
  • 47 percent of consumers reported they had money in their pockets after paying bills last month, an increase of 2 points from the month before.
  • Of those who reported having money left over, more than 16 percent said that amount was greater than they had the previous month, a jump of nearly 6 points from December.
Spending Intentions Remain Steady
Consumers reported they spent markedly less in January compared to the previous month, which is typical spending behavior after the holidays. Despite the increase in the number of consumers having money left over after paying bills, consumers say they will hold the line on spending next month.
  • 54 percent said they would spend about the same next month, compared to just 43 percent who said that last month. In addition, the percentage of people who said they would spend more did not change.
  • The percentage of people who said they would spend less also declined: 21 percent reported they would spend less, a decrease of 10 percentage points from the month before.
Consumers Stay Conservative with Discretionary Spending Plans
Consistent with last month’s data, consumers reported this month that they intend to be conservative with their discretionary spending.
  • Just 7 percent said they would spend more next month on discretionary personal items like going out to dinner or the movies, which is the lowest percentage since January 2011. In addition, 49 percent said they would spend less next month on discretionary personal items, an increase of 1 percent, while 41 percent said they would spend about the same as the prior month, an increase of 3 points.
  • In addition, 45 percent reported they would spend less next month on major personal purchases like a vacation, which is down 2 percentage points from the month before, while 40 percent said they plan to spend the same, up 3 points from December.
  • Household expenditures are expected to remain largely the same in February: 37 percent planned on spending more in the next 30 days, the same as last month, while 9 percent said they would spend less, an increase of 1 percentage point from the month before. Fifty-two percent said they would spend the same amount as the month before, a decrease of 1 percentage point from the month before.
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, visithttp://www.discoverfinancial.com.

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