Retailers, consumers and prices
Consumers more confident, still not spending
Discover’s U.S. Spending Monitor for August showed a rebound, with results rising to 87 (out of 100) from July’s 83.5.
A whopping 21 percent felt economic conditions were improving, marking a high for the monitor and up 7 points from July. And, just over 21 percent felt their own finances were shaping up, marking the highest number reported since August 2008 (aka the month before the Lehman bankruptcy frazzled the markets).
Still, for the third month in a row, over 50 percent of respondents said they plan to cut discretionary personal spending in the month ahead.
Where is the money going? Many seem to be putting it in the bank. The percentage of consumers planning to save and invest the same amount or more in the month ahead shot up to 58 percent, 3 points higher than July.
“The rise in the stock market and stable gas prices may have given consumers a reason to believe things are improving and the ability to save and invest more,” said Julie Loeger, senior vice president of brand and product development for Discover. ”But improved economic and financial attitudes has not translated into increased consumer spending, a cause for concern for retailers counting on revenue from back-to-school shopping and as the holiday shopping season approaches.”
Still, just 46 percent reported having money left over in August after paying their monthly bills, a Monitor-low and 5 points lower than a year ago. Even 22 percent of those who had money to spare have less of it. That’s up 3 points from July and the highest level since December.
Want a bit of good news? Only 46 percent of consumers felt economic conditions were getting worse. That’s down 6 points from July and is also a Monitor-low. In August 2008, 65 percent of consumers felt economic conditions were getting worse. Also, 46 percent said they felt their own finances were heading south. That’s a 5 point improvement from July and the lowest it has been since December 2007.