Consumers’ attitudes about the economy just keeping getting worse, according to a new study, and people’s fears are forcing them to cut back on everything from summer vacations to groceries.
Today Discover released June’s Spending Monitor report. The monthly report, which reveals current spending trends and confidence amongst consumers, finds that for six consecutive months now, consumers’ “attitudes about the economy have trended downward while spending intentions have risen with living expenses rising beyond their control,” according to an e-mail from Stephanie Blank, a spokeswoman for Discover.
The report reveals that economic conditions have resulted in 62 percent of Americans altering their vacation plans this summer, with another 16 percent canceling vacation plans altogether. While 41 percent of consumers say the main way they are fighting high gas prices is to cut back on entertainment spending, 55 percent say they are beginning to cut back on everyday living expenses in order to keep up with gas prices.
The Monitor shows that consumer confidence in the economy has fallen to “a new Monitor low” — in June, it hit 30 points lower than a year ago. According to the report, consumers believe living costs will only go up. There was a 50 percent increase since January in the number of people who expect they will be spending more next month, and a rise of 20 percent in people who think they will be spending more on everyday expenses such as gas and groceries. To keep up, 56 percent of consumers plan to cut back on discretionary expenses, such as eating at restaurants and going to movies. This is up seven points from six months ago.
In this report, nearly 60 percent of consumers rated their personal finances as fair or poor, which has been consistent over the past six months. Last month, a new high was hit, and continues this month: 54 percent of consumers believe their personal finances are getting worse.
In the past six months, we’ve watched consumer optimism about the economy decline sharply and at the same time, witnessed a forced rise in spending intentions spurred by high energy and food prices.
I’ve only been out of college for one year, and so far the real world has shown itself to be pretty darn scary. I’m coping well enough right now, but I fear what the future holds (a Vespa, perhaps?). Are you worried about your finances in the coming months? Are you beginning to cut back on basic expenses to keep up with gas costs?
See related: Gas prices take toll on family visits, American Bankers Association reports increased card delinquencies, Fed’s G.19 report shows credit card use rebounded in May