Consumers ages 18-39 Sour on the Economy, Finances; Discretionary
Spending Intentions Decline for First Time in Four Months
RIVERWOODS, Ill., Jun 02, 2010 (BUSINESS WIRE) --Consumer confidence declined in May as 18- to 39-year-olds who showed a
surge in confidence in April soured on the economy and their finances in
May, according to the Discover U.S. Spending Monitor.
The Monitor - a poll of 8,200 consumers that tracks consumer confidence
and spending intentions on a daily basis - declined 1.1 points in April
to 90.4 (based out of 100), after two consecutive monthly gains.
Overall, 31 percent believe economic conditions are improving, a 3-point
decline from last month's record high.
Confidence Declines Among 18-to 39-Year-Olds
Fifty-two percent of younger consumers rated the economy as poor, an
increase of 7 points from the previous month. By comparison, older
consumers who rated the economy as poor increased only three points.
Other indicators:
-
The number of consumers ages 18 to 39 who felt economic conditions
were worsening increased 4 points to 44 percent.
-
Those same consumers who felt their personal finances were getting
worse increased 5 points from the previous month to 44 percent.
-
25 percent of 18-to 39-year olds felt their finances were getting
better in May, a point lower than April.
"The optimism consumers between the ages of 18-39 showed the past couple
months reversed course in May," said Julie Loeger, senior vice president
of brand and product management for Discover. "It is unclear whether
this is simply a one-month anomaly or a sign of worse to come.
Hopefully, consumer confidence among this age group will rebound heading
into summer."
Discretionary Spending Intentions Fall For the First Time in Four
Months; Overall Spending Remains Flat
The decline in economic and financial confidence helped end a four-month
increase in discretionary spending intentions. Overall, 10 percent of
consumers said they would spend more on discretionary items, a 1-point
decline from April. 56 percent of consumers planned to keep their
overall spending flat in the month ahead.
There was also a 1-point decline in the number of consumers planning to
increase spending in the following categories:
-
Home remodeling or new appliances (decreased from 18 percent to 17
percent)
-
Vacations or furthering their education (decreased from 16 percent to
15 percent)
-
Sporting events, restaurants or hobbies (decreased from 11 percent to
10 percent)
More Consumers Rate the Economy as Poor, but 48% Have Money Remaining
After Paying Monthly Bills
Fifty-one percent of consumers rated the economy as poor in May, a
slight (1-point) increase from April. Forty-five percent feel economic
conditions are getting worse, a 2-point increase from the previous month.
The decline in economic confidence didn't affect how consumers currently
view their finances. Overall, 35 percent currently view their finances
as good or excellent, a 14-month high. Looking ahead, consumers were not
as optimistic. Forty-seven percent felt their finances were getting
worse, a 3-point increase from the previous month.
Despite the decline in confidence, 48 percent of consumers expect to
have money left over after paying monthly bills. For fourteen months
now, this number has been below 50 percent, though May's 48 percent W is
the highest since February.
The number of consumers expecting an income shortfall in the month ahead
remained the same at 37 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(R) 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.
SOURCE: Discover Financial Services
Matthew Towson
Discover
224-405-5649
matthewtowson@discover.com