Consumer Spending Intentions Stabilize; Monitor-high 57% Percent Plan to Keep Spending Intentions Flat
February saw consumer spending intentions stabilize after months of cutbacks. A Monitor-high 57 percent planned to spend the same amount of money in the month ahead as they did in February, breaking the previous high by 3 points. Discretionary spending intentions also leveled off after months of cutbacks. In the last two years, February marked only the third month in which all discretionary spending categories surveyed showed less than a majority of consumers planning to spend less.
However, rather than increase spending, consumers plan to keep their discretionary spending intentions the same. Forty-one percent expect to spend the same in March as they did in February on discretionary items like going out to dinner or the movies, a 4-point increase. Thirty-three percent plan on spending the same as the prior month on home improvement purchases, also a 4-point increase, and 38 percent plan on spending the same on major purchases like a vacation, a 3-point increase. A majority of consumers even expects no changes in their savings and investing, 52 percent, and spending on household expenses like gas and groceries, 62 percent.
“After months of cutbacks, we’ve seen two months in a row now in which consumer spending intentions appear to have stabilized,” said Julie Loeger, senior vice president of brand and product management for Discover. “Consumers seem to be comfortable as to where they are in terms of spending.”
Monitor-low 35% of Consumers Concerned About Added Expenses, Income Shortfall
Consumers also were more comfortable with their budgets in February. Just 35 percent of consumers are expecting an added expense or income shortfall in the month ahead, a Monitor low, while nearly half, 49 percent, are not expecting one. More consumers in February, 48 percent, also were confident they would have money left over after paying monthly bills versus January, 47 percent. On a less positive note, this was the 11th straight month this number has remained below 50 percent. Of those who do have money left over, 69 percent said they would have the same money left over as the previous month, a 3-point increase.
Fewer Consumers Feel Economic Conditions Are Getting Worse, Views on Finances Unchanged
While a majority of consumers, 57 percent, continue to rate the economy as poor, there was a decrease in the number of consumers in February who felt economic conditions were getting worse. Overall, 46 percent felt the economy was deteriorating, a 3-point decrease from January. Twenty-nine percent felt economic conditions were improving, a 2-point increase from the prior month.
Consumers’ financial outlook remained unchanged in February. Forty-seven percent feel their finances are getting worse, the same as last month.
“Despite a little improvement in economic sentiment, it was not enough to improve consumer attitudes about their finances,” said Loeger. “However, the Monitor has shown in the last couple of months an increase in the number of consumers balancing their budgets and having money left over. If this trend continues, it hopefully will give consumers some financial confidence.”
