Consumers seemed to gain confidence in the economy in August, according to Discover Financial Services' monthly U.S. Spending Monitor.
The Riverwoods, Ill., credit card company was expected to announce today that its spending index had jumped 2.6 points last month, to 87.8, its highest total this year and the largest monthly gain since the spending index was introduced in 2006 and pegged at 100.
Sixty-five percent of consumers said that the economy was getting worse, compared to 73% who felt that way in July. This was the second consecutive monthly drop and the largest decline ever.
Fifty-one percent said their personal financial conditions had declined, slightly better than in July when 55% said the same.
Discover said that in recent months its spending index has tracked the price of gasoline, which surged ealier this year but fell in August.
Though falling gas prices may make consumers feel more confident, this did not translate into spending increases, Discover said. The proportion of people who said they plan to increase spending this month, from August levels, fell to 33%, compared to 40% who said in July that they expected to increase expenditures.
"After months of discretionary cutbacks to compensate for record gas prices, oil's retreat in August may have given consumers a wait-and-see attitude in terms of their spending in the month ahead," Margo Georgiadis, a Discover vice president and its chief marketing officer, said in a press release.
Though "their confidence in the economy has improved, the Monitor's numbers are still showing … consumers acting cautiously when it comes to increasing discretionary spending."
