Discover U.S. Spending Monitor(SM)Consumer Confidence Jumps in January

by Mercator Advisory Group 0

Discover’s monthly consumer confidence survey of 8,200 U.S. consumers flashed some positive signals for consumer confidence, but with an overtone of conservative spending outlook.

Nearly 30 percent of consumers felt the overall economy is getting better, a jump of more than 6 percentage points from December and the highest figure in the last year. At the same time, those who reported their personal finances were improving rose nearly 5 percentage points to 23 percent — also the highest figure since February 2011.

The percentage of people who rated the U.S. economy as poor also declined from the previous month, down 2 percentage points to 56 percent. At the same time, the percentage of people who rated the economy as good or excellent exceeded 11 percent, an increase of more than 2 percentage points from the month before and the highest percentage for the Monitor since September 2008.

On the other hand, spending outlook remains clouded. While spending intentions were lower after the seasonal December peak, improved confidence does not seem to be translating into growth in spending intentions.

— 54 percent said they would spend about the same next month, compared to just 43 percent who said that last month. In addition, the percentage of people who said they would spend more did not change.

— The percentage of people who said they would spend less also declined: 21 percent reported they would spend less, a decrease of 10 percentage points from the month before.

In particular, discretionary spending does not look bullish. For discretionary personal spending such as entertainment and dining, 49% expect to reduce their spending in the next month, and for major expenses like vacation, 45% expected to spend less.

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