Discover’s ongoing tracking study of consumer sentiment showed marginal increases for October, affirming the ongoing cautious sentiment of consumers in the economic recovery.
The Monitor, a 4-year-old daily poll tracking economic confidence and spending intentions of nearly 8,200 consumers throughout the month, recorded a 2-point rise to 79.0 percent. Fourteen percent of consumers felt economic conditions were getting better in October, a 2-point rise from September. Sixty-two percent felt economic conditions were getting worse, down 1 point from September.
Despite the fact that more consumers feel economic conditions are improving, a record 69 percent view the current state of the economy as poor.
The current outlook for holiday spending is bearish, although Discover notes that sentiment often changes over the course of the holiday season:
Early indications suggest that more consumers are heading into the holiday season planning to spend less on holiday gifts compared to 2010. Sixty-one percent of consumers, so far, say they plan on spending less this year on holiday gifts than they did last year, 6 points higher than what was reported in the Monitor in 2010. Only 9 percent plan on spending more on holiday gifts this year, compared to 11 percent in 2010.
In years past, Monitor data has shown that the percentage of consumers intending to spend less on holiday gifts than the year before steadily decreases from the start to the end of the holiday season. The Monitor will continue to ask consumers their holiday spending intentions through Christmas.
So while sentiment is undeniably negative at this time, spending can take its own course during the holidays. Mercator’s surveys also highlight the higher credit card spending comfort levels of more affluent consumers with strong credit histories.