Views on Personal Finances Improve, Spending Intentions Remain the Same

RIVERWOODS, Ill.--(BUSINESS WIRE)--May. 2, 2012-- Consumer confidence was flat in April, as more people saw their personal finances improving, while the effect of higher gas prices may have contributed to declining attitudes about the overall economy. The Discover U.S. Spending Monitor, a nearly 5-year-old daily poll tracking economic confidence and spending intentions of nearly 8,200 consumers throughout the month, climbed 0.2 points to 96.7. The Monitor remains at its highest level since October 2007.

In April, 39 percent of respondents rated their personal finances as good or excellent, a 3-point increase from the month before. At the same time, high gas prices appear to be taking their toll on spending. According to the poll, more than half of respondents said that high gas prices are forcing them to change summer vacation plans, while 61 percent said that the high gas prices may cause them to cut back on discretionary spending.

The result of higher gas prices is felt most acutely among younger respondents and people of households earning less than $40,000 annually. Of those in households earning less than $40,000 annually, 74 percent said they have had to change spending plans because of high gas prices, with 65 percent of that group saying they have also had to change vacation plans.

Overall Spending Remains Steady

More consumers reported in April that they are spending about the same as the month earlier and that they plan to spend about the same next month. In April, 42 percent reported spending about the same as the month earlier, compared to March’s figure of 41 percent. At the same time, 50 percent are planning to spend the same in May, a rise of 2 percentage points from the month earlier.

• Only 44 percent reported that they would spend more next month on household expenses, which is a drop of 8 percentage points from March. Of respondents, 46 percent said they would spend the same next month on household expenses, which is a jump of 7 percentage points from the month earlier.
• Overall, 45 percent of respondents said they would spend less next month on major personal purchases, such as vacations, a 1-point increase from March and inconsistent with past Monitor surveys during this time of year. Prior surveys usually show an increase in the number of consumers planning to spend more in this category as they plan their summer vacations. High gas prices may be altering summer plans.
• At the same time, spending intentions for home improvements inched up slightly: 18 percent said they planned to spend more next month on household improvements, which is the highest figure since June 2011 and consistent with spending intentions on home improvement in the warmer months.

Consumers Rate Personal Finances at Highest Point since October 2008

Despite increasing concerns about the U.S. economy and rising gas prices, more consumers reported positive attitudes about their personal finances in April.

• Overall, 27 percent said their personal finances are getting better, an increase of 2 percentage points over March. Feelings that personal finances are getting worse remained flat.
• There was a big dose of optimism from consumers in households with income of more than $75,000 annually. Forty-three percent said their personal finances are improving, a 7-point increase from March and the highest figure since January 2008.

Economic Attitudes Mixed

Sixteen percent of respondents now rate the U.S. economy as good or excellent, compared to 13 percent who had that attitude in March. In addition, the number of people who report the U.S. economy as poor stayed at 50 percent.

At the same time, 47 percent said economic conditions are worsening – an increase of 3 percentage points from March and the highest figure since 2012 began.

• The attitudes about the U.S. economy were mixed according to income level. Fifty-five percent of consumers in households earning less than $40,000 annually said the economy is getting worse, an increase of 8 percentage points from the month before.
• Among respondents in households earning between $40,000 and $75,000 a year, 45 percent reported the economy was getting worse, which is a decrease of 2 percentage points from the month before.
• For households earning more than $75,000 a year, 39 percent said that the economy was getting worse, a slight increase from the month before.

About Discover U.S. Spending Monitor

The Discover U.S. Spending Monitor^SM 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 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 http://www.discoverfinancial.com.

Source: Discover Financial Services

Discover
Matthew Towson, 224-405-5649
matthewtowson@discover.com