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Survey: Consumer spending jumps

  Consumer confidence reached its highest point in three years and saw its biggest month-to-month increase since April as more Americans believe U.S. economic conditions are improving and their personal finances are getting better, according to the Discover U.S. Spending Monitor.

 The Monitor, a poll of 8,200 consumers tracking confidence and spending intentions on a daily basis, rose 4.3 points in November to 91.8. Thirty-one percent of consumers feel economic conditions are improving, a 4-point increase from October. Forty-five percent of consumers feel economic conditions are getting worse, a 4-point decrease from October.

 Consumers are feeling better about their personal finances, as well. Twenty-three percent, the most since February 2008, feel their finances are getting better, up 2 points from October and 4 points from 2009. For the second month in a row, fewer consumers report their finances are worsening; 45% say their finances are getting worse, down 2 points from the previous month and 4 points from last year.

 Improved confidence among consumers is reflected in increased holiday spending intentions compared to this time last year, a hopeful sign for retailers looking to rebound from dismal holiday sales over the last two years.

9-Point Change in Holiday Spending Intentions Year-Over-Year

 In 2009, two-thirds of consumers reduced their holiday spending budget, and half headed into the holidays looking to cut their discretionary spending. This year, the Monitor’s numbers tell a different story.

 The number of consumers who say they expect to spend less this holiday season has fallen 9 points from 2009. Last November, 65% of consumers said they were going to spend less on holiday gifts than they did the year before; only 56% feel that way this year. Of the nine percent who shifted, the majority said they would spend about the same, but one in four said they would be spending more.

 Consumer Spending Intentions: Slightly More Discretionary Spending, Less Cutting Back

 The Monitor reported a 12-point rise to 35% in the number of consumers intending to spend more next month. Heading into the holiday shopping season, the rise was not unexpected, as the Monitor reported similar increases during this time over the last three years. Nineteen percent plan to spend less next month, down 2 points from October and 1-point from a year ago.

 But consumers’ discretionary spending intentions are more upbeat compared to last year. In 2009, half of consumers went into December looking to cut discretionary spending. This year, many of them plan to either spend the same or more on discretionary purchases.

 Better views from consumers about their personal finances may have to do with the fact that for the first time in four months, more consumers have money left over in their budgets after paying monthly bills. Forty-nine percent said they had money left over, tying a Monitor high for 2010. However, November marked the 20th consecutive month this number has been below 50 percent.

 Eighty percent of those who do have money left over after paying monthly bills planned on having the same or more money left over than the previous month, the fourth straight month this number has equaled or topped 80 percent.

 For the first time in five months, the Monitor reported an increase in the number of consumers expecting an income shortfall. The number reached 40% in November, rising 3 points from the previous month. In all likelihood, this is due to tighter budgets during the holiday shopping season. A similar rise was reported heading into the holiday shopping season last year.

For more Discover U.S. Spending Monitor survey data, charts and information, please visit

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