Economic Concerns Drives Index to Lowest Point of 2012
RIVERWOODS, Ill.--(BUSINESS WIRE)--Aug. 8, 2012--
Concern over the economy and anticipation of higher expenses brought the
Discover U.S. Spending Monitor to its lowest level of the year in July.
The Monitor, a 5-year-old daily poll tracking economic confidence and
spending intentions of nearly 8,200 consumers throughout the month,
declined 1.4 points to 89.3. The monitor last dropped below 90 in
December 2011.
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Highlights of Discover U.S. Spending Monitor Results
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May
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June
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July
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2012
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2012
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2012
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Discover U.S. Spending Monitor Index
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95.5
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90.7
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89.3
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U.S. Economy Improving
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33%
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29%
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28%
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Personal Finances Improving
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25%
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23%
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23%
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Economic Outlook Increasingly Pessimistic
The percentage of respondents reporting the U.S. economy as poor
remained steady at 53 percent. However, consumers who expect the economy
to get worse increased four percentage points from the prior month to 53
percent in June. This is the first time in 2012 that more than half of
respondents felt this way.
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There was a significant increase in the percent of men who feel the
economy is getting worse, up nine percentage points from June at 57
percent. The number of women feeling this way remained unchanged at 50
percent.
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While 57 percent of married people expect the economy to get worse (an
increase of three percentage points from June), only 48 percent of
single people expect the economy to get worse. However, this was a
substantial increase from only 40 percent of single people with the
same expectation in June.
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Forty-four percent of adults making more than $75,000 expect the
economy to get worse, up one percentage point from June. For those
making between $40,000 and $75,000, there was a two-percentage point
increase to 55 percent. Nearly 59 percent of adults making less than
$40,000 expect the economy to get worse, an increase of 10 percentage
points from June.
Views on Personal Finances Remain Steady, Expectations Decline
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There was not a significant change in how respondents rate their
personal finances in July – with 34 percent rating their personal
finances as good or excellent (up one percentage point from June), 39
percent rating them as fair (down one percentage point) and 25 percent
rating them as poor (up one percentage point).
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The percentage of respondents who expect their personal finances to
get worse increased two percentage points from the previous month, to
49 percent. This is the highest level since December 2011.
Spending Intentions Increase Due to Rising Costs
While 28 percent of respondents plan to spend more next month (up two
percentage points from June), this is primarily driven by an increase in
non-discretionary items rather than a desire to spend more.
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With respect to household expenses, 38 percent of respondents expect
to spend more next month on household expenses (up five percentage
points from June), likely in response to gas prices. Expectations for
spending on discretionary entertainment expenses, household
improvements and major personal purchases remained similar to
expectations in June.
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Respondents were asked for the first time in July if they plan to
upgrade consumer electronics in the next three months. While 68
percent of respondents do not plan to upgrade, of those who do plan to
upgrade, 45 percent are most likely to buy a mobile phone and 28
percent are most likely to buy a computer. Thirteen percent of those
respondents plan to buy a tablet within the next three months.
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While the percentage of respondents who expect to save about the same
amount next month remained unchanged from June at 48 percent, many
respondents plan to adopt new cost savings measures in the next three
months. Asked in the Monitor for the first time in July, 35 percent of
consumers plan to either cancel vacations or dine at home rather than
at restaurants in order to save money.
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 (http://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 home loans, private
student loans, personal loans, online savings accounts, certificates of
deposit and money market accounts through its direct
banking business. 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
Discover
Matthew Towson, 224-405-5649
matthewtowson@discover.com