Just because the consumers are staying positive about the country's recovery from its economic topple doesn't mean they can't wait to spend once again.
According to the recent survey released, Discover U.S. Spending Money, there is growing confidence among the public that the economy will be back in shape. However, more than half of the consumers say that despite this they are sticking to the changes they have created on their spending habit. This includes cutting back on unnecessary spending like going out to dinner, movies and sporting events in the months ahead.
Julie Loeger, senior vice president of brand and product development for Discover says that many people have definitely developed positive attitudes towards the economy and the handling of their personal finances in August. Meanwhile, the public has gained information about the rise in the stock market and at the same time observed the stability of gas prices which lead them to think that the economy is on its way to improvement. This also implies the ability to save more and to invest more.
However, a positive outlook on how things are getting better does not readily translate to consumers' willingness to spend more. This poses a problem to retailers who are expecting revenue from back-to-school and holiday season shopping. Analysts like Thomson Reuters predict a 3.8 percent decline in back-to-school sales this year at big chain stores.
The survey revealed that 31 percent of the surveyed consumers believed that the economic environment was already improving. On the other hand, only 21 percent of them said that their personal finances were improving. The figure however is the highest reported since August 2008. A summary of the overall favorable attitudes is written in the Spending Monitor index which increased 3.5 points in August. It has a total of 87 points out of a hundred.
On the contrary, 46 percent of those surveyed believed said that the economic situation is in fact getting worse. The figure shows a decline from the August 2008 finding which had 65 percent of the consumers saying the same thing. The lowest reading since December 2007 about the negative attitudes of consumers about their personal finances was achieved in this year's survey at 46 percent.
However still, more than fifty percent of consumers are on the way to reducing personal spending. This attitude has been consistently recorded for three straight months already. Other than 52 percent of consumers saying they will be reducing expenses on dining out, watching movies and attending sporting events, there are 53 percent who plan to bring down major home improvement expenses, and 48 percent who are thinking of cutting major personal expenses like vacations from the budget.
Discover believes that instead of spending their money, consumers are definitely saving and eyeing different means to invest. They could be opening bank accounts or joining the stock market. The survey revealed 58 percent of consumers having these in mind, a figure which is 3 points higher from July's results.
The survey from Discover which revealed such results produces reports each month about the consumers' attitudes toward expenditure and the U.S. economy and personal finances. 8,200 U.S. adults were chosen randomly to participate in the said survey. Discover ranks number two in the recently conducted survey by J.D. Power and Associates about client satisfaction with their credit card providers.