Despite Worsening Economic Sentiment, 17% of Consumers Plan to Spend More on Summer Vacations, Highest Number in Nearly 2 YearsRIVERWOODS, Ill.--(BUSINESS WIRE)--Consumer confidence continued to decline as fewer consumers see economic conditions or their personal finances improving in the month ahead, according to the Discover U.S. Spending Monitor for June 2010.
“Summer travel seems to be the only area of increased spending by consumers whose confidence in the economy continued to decline”
The Monitor – a poll of 8,200 consumers tracking consumer confidence and spending intentions on a daily basis – fell 2 points in June to 88.4. Overall, 28 percent believe economic conditions are improving, a 3-point decline from last month and a drop of 6 points over the last two months.
Summer Vacation Spending Intentions Rise While Other Discretionary Spending Intentions Hold Steady
Despite increasing economic uncertainty, 17 percent of consumers, the highest in nearly two years, plan to spend more on a major purchase like a vacation in the month ahead. This is a 2-point increase from the prior month. Last year, the number of consumers planning to spend more in this category dropped 1 point from May to June.
There was little month-to-month change in the number of consumers planning to increase spending in other discretionary spending categories like:
- Going out to dinner, movies or sporting events (remained flat at 10 percent)
- Home remodeling or new appliances (decreased from 17 percent to 16 percent)
- Savings and investing (decreased from 9 percent to 8 percent)
“Summer travel seems to be the only area of increased spending by consumers whose confidence in the economy continued to decline,” said Julie Loeger, senior vice president of brand and product management for Discover. “But beyond vacations, consumers’ spending intentions have pretty much held steady.”
More Consumers See Economic Conditions Worsening, but Nearly Half Have Money Remaining After Paying Monthly Bills
Forty-eight percent of consumers feel economic conditions are getting worse, a 3-point increase from May and 5-point jump in the last two months.
The decline in economic confidence correlated with a 2-point drop to 33 percent in the number of consumers rating their finances as good or excellent. Looking ahead, only 20 percent feel their financial situation improving, 2 points lower than May.
Despite the drop in financial confidence, 49 percent of consumers expect to have money left over after paying monthly bills. While still below 50 percent for the 15th straight month, this is the highest this number has been since March 2009.
The number of consumers expecting an income shortfall in the month ahead inched up a point in June to 38 percent.
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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