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Retailers, consumers and prices

Consumers more confident, still not spending

September 2, 2009

save-bigWhile more consumers feel better about the economy, they are not getting back to their spending ways, according to a survey released on Wednesday.

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.

(Reuters photo)

Comments

As soon as I heard stimulus I said to all in local blogging that’s more than enough to give every AMERICAN a million dollars and still give half of it away. Talking about 700 billion that later turned into much more that didn’t need to be if we all recieved a million dollars. Given to us in the form of a national debit card and given as a rationing to spend on certain things and to issue credits as and where needed to make payments on those areas that need being pumped up. Wouldn’t have needed cash for clunkers,or any other 600 dollers that might have slithered by. Many more ideas that would have worked for AMERICANS but the government wouldn’t have enough to do and their jobs might be threatened. Well that wouldn’t have put as many of them out as it has the voting public.

Posted by obamamama | Report as abusive
 

As I have written several times in recent months, the economy has re-set itself at a lower level. There will be no “rebound” as most politicians would have you believe, just upward trends over several decades. This is all very good for the economy in the long run. People and businesses will have finally started to live within their means and not spend money that they don’t have, which is a wonderful process. All we need to do now is raise gasoline prices to $5+ per gallon and watch the economy improve even more. This will force new startup green businesses to develop energy efficient products, force auto makers to actually manufacture vehicles that don’t use gasoline or use very little, and make the world a generally better place to live.

Posted by Frank | Report as abusive
 

I’ve read both before me who have good qualities in their comments. I say give us all a million and dispurse payments for green only and people who are losing their houses. After thinking of it for awhile (money) would lessen crime. Why would anyone want to be a criminal if they had a place to live and food to eat, a hobby they could enjoy and possibly make money. How many self made millionaires are there that started with less. Many famous people started from less I think it would be the spurr of many more innovations. Thinking green and practicing what is already available combined with the open thinking of many others with their time available to spend on projects, voulenteer, and work. Yes I said work, I thought with money only allowed for green and certain troubled areas you would have to find a job to pay utilities and taxes for your house and gas for your new car. I saw a gap in the 2 and still good comming from everyone being a GREEN millionare. I gathered from 2 comments and maybe 3 heads are better than 2. Also population 360 million heads would be better than 3 if they would all vote.

Posted by Sammy | Report as abusive
 

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