But 51 percent of Americans feel economic conditions are getting worse, a 7-point jump from February and the highest number the Monitor has reported since September 2010. Twenty percent of respondents feel conditions are the same, while 25 percent of the population feels the economy is improving.
March also showed a decline in consumers’ attitudes about their personal finances. Thirty-two percent rate their finances as good or excellent, down 3 points from February. Forty-two percent of consumers rate their finances as fair, and 24 percent say their finances are poor. When asked if their finances were getting better or worse, 48 percent said their finances are worsening, up 3 points from February. Twenty-seven percent of consumers feel their finances are unchanging, and 22 percent say their finances are improving.
Majority of Consumers Spending More on Gas, Groceries; Cutting Discretionary Spending
The Monitor is reporting that consumers are once again showing signs of off-setting high prices at the pump with cuts in discretionary spending. Overall, 33 percent of consumers expect to spend more in the month ahead, an 8-point rise from February. As well, for the first time since July 2008, a majority of consumers, 55 percent, are planning to spend more on gas, groceries and their mortgages. This number jumped 14 points from February. Consumers are offsetting the rising costs of household expenditures by reducing spending in the following areas:
- Entertainment: Fifty-three percent of consumers are expecting to spend less in the next month on going out to dinner, movies or sporting events, up 6 points from last month. Thirty-five percent expect to spend the same, down 5 points from February, while 12 percent plan to spend more, unchanged from last month.
- Home Improvement: Fifty percent of consumers plan to spend less next month on home improvement purchases, up 4 points from February. Thirty percent expect to spend the same, down 6 points from February, while 14 percent plan to spend more, unchanged from last month.
- Travel and Memberships: Forty-eight percent expect to spend less on a vacation or health club membership, up 3 points from last month. Thirty-five percent expect to spend the same, down 5 points from February, while 12 percent plan to spend more, unchanged from last month.
“High gas prices inevitably take a bite out of consumers’ budgets,” said Julie Loeger, senior vice president of brand and product management for Discover. “Though we know our economy counts on discretionary spending in order to grow, spending less on baseball tickets, new home appliances or a family vacation makes financial sense when consumers are feeling pain at the pump.”
42 Percent Expecting an Income Shortfall Over the Next 30 Days
Despite consumers best efforts to balance their budgets in the wake of high gas prices, 42 percent say they are expecting an income shortfall in the next 30 days, 6 points higher than February and the biggest jump in the Monitor’s history. The jump comes despite the fact that 48 percent plan to have money left over after they pay their bills for the month, unchanged from February.
However, it has been two years since a majority of consumers reported having money left over. Furthermore, 27 percent of those consumers who do have money left over expected to have less money left over than the month before, a 5-point rise from February.
