Younger Consumers Lead Rebound in Confidence, Discretionary Spending Intentions Climb for Third Straight Month
RIVERWOODS, Ill.--(BUSINESS WIRE)--Consumer confidence rebounded in April, fueled by a distinct change of heart among 18- to 39-year-olds about the state of the U.S. economy, according to the Discover U.S. Spending Monitor.
“Consumers, especially those below the age of 40, are feeling better about the economy and less pessimistic about their finances”
The Monitor – a poll of 8,200 consumers that tracks consumer confidence and spending intentions on a daily basis – jumped 5.5 points in April to 91.5 (based out of 100), the highest the Monitor’s index has been since November 2007. Overall, 34 percent, the most ever, believe economic conditions are improving.
Confidence Climbs Among 18-to 39-Year-Olds
Forty-five percent of younger consumers rated the economy as poor, a decline of 13 points from the previous month. By comparison, older consumers who rated the economy as poor declined only three points. Other indicators:
- The number of younger consumers who felt economic conditions were worsening declined 9 points to 40 percent.
- Younger consumers showed the most improvement in terms of anticipated income shortfall: 40 percent said they expected an income shortfall in the month ahead, a 3-point decline from March.
- Those consumers ages 18 to 39 who felt their personal finances were getting worse declined 6 points from the previous month to 40 percent.
- 26 percent felt their finances were getting better in April, which tracked higher than the average of 23 percent.
“Consumers, especially those below the age of 40, are feeling better about the economy and less pessimistic about their finances,” said Julie Loeger, senior vice president of brand and product management for Discover. “Hopefully, the growing economic and financial confidence of younger consumers continues, and ultimately helps improve the confidence among all Americans.”
Plans to Increase Discretionary Spending Rises for Third Straight Month, but Overall Spending Remains Flat
The more optimistic economic and financial attitudes were coupled with a continuing positive trend toward discretionary spending intent. For the third straight month, the Monitor reported an increase in the number of consumers planning to spend more on discretionary purchases, while an unchanged 57 percent of consumers are planning to keep their overall spending flat in the month ahead.
Overall, 11 percent of consumers said they would spend more on discretionary items, hitting double-digits for only the third time in 12 months. In April, consumers said they planned to increase spending in the following categories:
- Home remodeling or new appliances (increased from 14 percent to 18 percent)
- Vacations or furthering their education (increased from 12 percent to 16 percent)
- Sporting events, restaurants or hobbies (increased from 8 percent to 11 percent)
Fewer Consumers Rate the Economy as Poor, but Less Than Half Have Money Remaining After Paying Monthly Bills
Half of consumers rated the economy as poor in April, a 7-point decrease from March.
A Monitor-high 23 percent of consumers felt their finances were getting better in April, 2 points higher than March. Overall, 44 percent felt their finances were getting worse, a 4-point decline from the previous month.
Despite rising consumer confidence, for the 13th straight month, consumers with money left after paying monthly bills were in the minority. But of the 46 percent who had money left over, 82 percent expect to have the same or more money remaining than the previous month after paying monthly expenses.
After hitting 39 percent in March, there was a 2-point decline to 37 percent in the number of consumers expecting an income shortfall in the month ahead.
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.
