Retailers, consumers and prices
Check Out Line: Consumers cut back again in June
Check out the continued concern over the U.S. economy.
Discover’s US Spending Monitor, released on Wednesday, showed that the economy is weighing more on consumers’ minds when it comes to everyday purchases. The monitor, which began in May 2007 with a base index of 100, fell for the first time in four months, to 85.6 from 86.2.
Fifty-nine percent of the 8,200 respondents rated the economy as poor, up from 55 percent in May and the first increase since February. Still, 33 percent rated their own finances as good or excellent, in line with May’s responses.
Gas prices inching back up took their toll. Thirty-five percent of consumers polled in June said they expect to spend more on items like gas and groceries, up 5 points from May and a 10 point jump over the last two months.
“The optimism we were seeing from consumers in terms of the economy over the past few months may have hit a roadblock in June,” said Julie Loeger, senior vice president of brand and product management for Discover Financial Services. “With unemployment still rising and uncertainty as to whether the economic recession is ending, consumers are seeing no reason to change the spending restraint they’ve exhibited over the last several months.”
Consumers said they would spend less on going out to dinner or the movies and other discretionary spending habits. Fifty-one percent said they plan to spend less in the month ahead on discretionary purchases, up 2 percentage points from May.
One note of hope is that for the second month in a row, less than half of the respondents said they felt that economic conditions are getting worse, Loeger said. However, only 47 percent said they have money left over after paying their monthly bills, a 1 percent decline from May.
The results are culled from polls of 8,200 consumers, with 275 interviewed each night during the month by survey research firm Rasmussen Reports.
Also in the basket:
Test your foodie IQ (Chicago Tribune)
(graph from Discover’s US Spending Monitor)