RIVERWOODS, Ill. — Discover Card's brand new Spending Confidence Monitor has found falling consumer confidence and an unwillingness among cardholders to spend, the brand reported.
The survey revealed the decline in spending confidence coincides with an increased number of consumers facing money shortages along with a decreased confidence in personal finances, Discover said.
Thirty percent of consumers felt their personal finances were improving compared to 34% last month. Additionally, consumer confidence in managing their budgets declined as fewer (49%) reported having money left over after paying all of their bills compared to last month (55%). Of those consumers who did have money left over, 78% were expecting to have the same or more money left over in July as well.
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Forty-nine percent of consumers said they expected to sustain their spending from June to July, but when it comes to spending more, consumers were not expecting to do so. Genders were fairly equal, with only 33% of men and 35% of women planning to spend more in July. Younger adults planned to outspend older adults with 42% of 18-29-year-olds saying they will spend more in July. By contrast, less than a third (28%) of those 65 and older are planning to spend more, a nine-point decline from last month's survey.
Increased pressures on spending from added expenses or an income shortfall in the next 30 days do not appear to be a significant driver of fewer consumers expecting to spend more in July. There were a consistent 38% of consumers expecting these events in July and June. Some groups do expect more income and expense pressure than others. The number expecting a shortfall in income or added expenses rises to 45% among adults under 40 and families with kids.
The number of consumers who had money left over after paying monthly bills fell to 49% in June, down from 55% in May. The drop was significantly worse among some groups such as younger adults (18-29), where only 39% said they had money left over compared to 48% in last month's survey. Families with kids saw a seven-point decline to 44%. A healthy 78% of those who did have money left over expect to have the same or money left over in July as well.
Current numbers also showed 38% of consumers having no money left over after paying their monthly bills, up from 34% from last month's survey. The number rises to nearly half (48%) among younger adults (18-29). The number of families that had no money left over rose from 38% in May to 46% in June.
Beyond tighter budgets, a rising number of consumers are at risk from a sudden loss in income. The Discover survey examines how long consumers could support their current lifestyle if they were faced with an unexpected loss of income. Overall, 66% said they could continue their current lifestyle for at least one month, but a third (30%) said they were unable to do so, up from a quarter (25%) in last month's survey.
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