Discover's US Spending Monitor Hits New Low in December
The Discover U.S. Spending Monitor fell for the fourth consecutive month in December, declining more than three points to a new low of 76.6 (based out of 100). Both components of the monthly spending index – consumer confidence in the U.S. economy and consumer spending intent – reached new lows during the month, as concerns about the economy may be weighing on post-holiday spending plans.
A record high 65 percent rated the economy as poor, and 70 percent said things were getting worse. Personal finances did not fare any better as a record low number of Americans – 35 percent – gave their own finances a good or excellent rating, and a record high number – 23 percent – rated them as poor. A majority, 55 percent, said their personal finances were getting worse in December.
“While a post-holiday drop-off in spending intentions is expected, the 10-point gap between this year and last year’s numbers may be an indication of how consumers are feeling about the economy and the spending plans they are making in light of the crisis,” said Julie Loeger, senior vice president of brand and product management for Discover Financial Services. “The gap was a bit surprising considering household expense expectations were much higher a year ago, but economic sentiment was clearly not as poor as it is now.”
“A majority of consumers have responded to the nation’s economic crisis by cutting spending,” Loeger said. “While this may not be helpful to the economy, consumers are keeping their budgets in balance, which may give them more confidence in the months ahead should the economy turn a corner.”
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