Discover Survey: Consumers Less Likely to Increase Spending in July

The Discover Spending Confidence Monitor revealed only 34 percent of consumers expected to spend more in July than they did in June, a six point decline from last month’s inaugural survey. While consumers sustained their spending from May to June, their views on the economy remained pessimistic, as 62 percent rate the economy as fair or poor and 59 percent expect the economy to worsen.

The survey by Discover Card reveals the decline in spending confidence coincides with an increased number of consumers facing tighter budgets along with a decreased confidence in personal finances. Thirty percent of consumers felt their personal finances were improving compared to 34 percent last month. Additionally, consumer confidence in managing their budgets declined as fewer (49 percent) reported having money left over after paying all of their bills compared to last month (55 percent).

Forty-nine percent of consumers said they expected to sustain their spending from June to July, but when it comes to spending more, fewer consumers expected to do so. Genders were fairly equal, with only 33 percent of men and 35 percent of women planning to spend more in July. Younger adults expected to spend more than older adults with 42 percent of 18-29 year-olds saying they will spend more in July. By contrast, less than a third (28 percent) of those 65 and older are planning to spend more, a nine point decline from last month’s survey.

"While consumers sustained their spending from May to June, it appears that fewer are likely to increase July spending," said Margo Georgiadis, Executive Vice President and Chief Marketing Officer for Discover Financial Services. "While nearly half expect to spend about the same, there is a 15 percent or 6 point drop from 40 percent to 34 percent of consumers expecting to spend more from last month’s survey."

Increased pressure on spending from added expenses or an income shortfall in the next 30 days do not appear to be significant drivers of fewer consumers expecting to spend more in July. A consistent 38 percent of consumers expected these events in July and June. The number expecting a shortfall in income or added expenses rises to 45 percent among adults under 40 and families with kids.