Discover survey finds consumers plan to spend less in January

Paying the Bills - BSN

(Best Syndication News) - Discover Financial Services (NYSE: DFS) found lower-income consumers were less confident on the economy and their personal finances in December 2012. The monthly survey dubbed “Discover U.S. Spending Monitor” showed a 4.3-point decline to 91.1 points for the month of December. This could translate into less post-season spending.

The Discover survey found 15 percent of the respondents rated the economy as good or excellent, which was a 3-point decline from November 2012. However, in December 2011, only 9 percent that thought the economy was doing well. Thirty-two percent of the consumers surveyed think the U.S. economy will improve, which was 3-percentage points lower than the previous month.

Consumers who made less than $75,000 were more likely to think the economy will get worse. Fifty-four percent of the people making between $40,000 and $75,000 thought the economy would get worse, which is 4-percentage points more than the overall population. Similarly, 53 percent of the people making under $40,000 per year expect a downgrade in the economy, which are three percentage-points more than the entire sample. Only 40 percent of those making over $75,000 viewed the economy as lacking, which is 10-percentage points less than the overall rating.

The Personal finance outlook for consumers also declined in December 2012 compared to the month before. Only 34 percent of consumers rated their personal finances as good or excellent; two percentage points lower than November 2012. Twenty-four percent of the respondents rated their personal finances as poor. Only 23 percent thought that their finances would improve, which was 3-percentage points lower than November. Twenty-seven percent thought their finances would stay the same, which was an increase by 3-percentage points from the month before. Fifty-two percent of the respondents with incomes between $40,000 and $75,000 anticipate their personal finances to worsen.

Forty-two percent of the respondents said they spent more in December leading up to the holidays than they did in November; this was a six percent increase. The spending trend was short lived however, as only 26 percent of the respondents expect to spend more next month, which is 13-percentage point less than November. Thirty-one percent of the consumers said they plan to spend less in January 2013, which is a 14-point increase from November’s responses.

Spending less by category was as follows: 51 percent will spend less on household improvements (2-point increase), 48 percent will spend less on major personal purchases (up by 2-points), and 48 percent plan to spend less on discretionary personal expenses (up by 3-points). Fifty percent plan to spend around the same for household expenses such as groceries, and gas; this was a 2-percentage point increase from November.

By: Dave Reddy

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