Discover Financial Services

Matthew Towson

224-405-5649

matthewtowson@discover.com

Logo: http://www.discoverfinancial.com/

The Discover U.S. Spending Monitor fell for the fourth consecutive month in December, declining more than three points to a new low of 76.6 (based out of 100). Both components of the monthly spending index - consumer confidence in the U.S. economy and consumer spending intent - reached new lows during the month, as concerns about the economy may be weighing on post-holiday spending plans.

A record high 65 percent rated the economy as poor, and 70 percent said things were getting worse. Personal finances did not fare any better as a record low number of Americans - 35 percent - gave their own finances a good or excellent rating, and a record high number - 23 percent - rated them as poor. A majority, 55 percent, said their personal finances were getting worse in December.

The economic and financial angst consumers are feeling has them ratcheting down spending plans in January.

Record Number of Consumers Plan on Cutting Back Discretionary Spending

According to the results of surveys conducted for the Monitor during December, the outlook for spending at the start of the New Year appears to be a continuation of the belt-tightening consumers have been practicing over the last few months. Over one-third (34 percent) of consumers plan to spend less in January. This compares to 22 percent in November and just 24 percent from a year ago.

"While a post-holiday drop-off in spending intentions is expected, the 10-point gap between this year and last year's numbers may be an indication of how consumers are feeling about the economy and the spending plans they are making in light of the crisis," said Julie Loeger, senior vice president of brand and product management for Discover Financial Services. "The gap was a bit surprising considering household expense expectations were much higher a year ago, but economic sentiment was clearly not as poor as it is now."

Even as a record high 68 percent of consumers say they intend to have the same or lower expectations for household expenses like gas and groceries in January, the relief from lower gas prices has not prevented a record high number of consumers from planning to pull back discretionary spending in every one of the spending categories tracked by the Monitor. Nearly 55 percent are trimming discretionary and home improvement expenses, and 52 percent are holding off on major personal purchases. All of these numbers were nearly three points higher than last month.