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Press release from Business Wire

Economic Confidence Declines in August, According to the Discover U.S. Spending MonitorSM

<p class='bwalignc'> <i><b>Economic Outlook and Higher Household Spending Drives Index to Lowest Level in 2012</b></i> </p> <p class='bwalignc'> </p>

Wednesday, September 05, 2012

Economic Confidence Declines in August, According to the Discover U.S. Spending MonitorSM07:00 EDT Wednesday, September 05, 2012 RIVERWOODS, Ill. (Business Wire) -- Economic concerns and anticipation of continued higher expenses pushed the Discover U.S. Spending Monitor to its lowest level of the year in August, declining 0.7 points from July to 88.6. The Monitor is a 5-year-old daily poll tracking economic confidence and spending intentions of nearly 8,200 consumers throughout the month. August marked the third consecutive monthly increase for those believing the economy is getting worse.   Highlights of Discover U.S. Spending Monitor Results     June     July     August       2012     2012     2012 Discover U.S. Spending Monitor Index     90.7     89.3     88.6 U.S. Economy Improving     29%     28%     26% Personal Finances Improving     23%     23%     20%   Economic Rating at 9-Month Low While the number of respondents reporting the U.S. economy as poor leveled out from June to July, 56 percent of respondents ranked the economy as poor in August. This was the highest level since January 2012. Respondents with children who view the economy as poor increased 7 percentage points from July to August to 58 percent. Respondents without children viewing the economy as poor remained unchanged at 54 percent. There was an 8-percentage point increase to 50 percent in the number of consumers making $75,000 or more viewing the economy as poor. This compared with little change for those making between $40,000 and $75,000, poor rating declined 1 percentage point to 53 percent, and those making less than $40,000, poor rating increased 1 percentage point to 62 percent. Respondents believing the economy is getting worse increased for the third straight month to 55 percent, up 2 percentage points from July and 11 points from March 2012. In August, 54 percent of women believed the economy was getting worse, an increase of 4 percentage points from the previous month, while 56 percent of men had the same belief, a decline of 1 percentage point. Consumers Believing Their Personal Finances are Getting Worse Reaches 10-Month High Fifty-one percent believe their personal finances are getting worse, an increase of 2 percentage points from the previous month. This is the highest level since October 2011 when 55 percent of respondents felt their personal finances were getting worse. However, there was little change in how respondents currently rate their personal finances in August, with 34 percent rating their personal finances as good or excellent, equal to July, 38 percent rating them as fair, down 1 percentage point from July, and 25 percent rating them as poor, also equal to July. High Food and Gas Prices May be Affecting Discretionary Spending Intentions Of all respondents, 31 percent plan to spend more next month (an increase of 4 percentage points from the prior month). This is the highest number reported for August since 2008 and may reflect steadily rising food prices and record-high national average gas prices during the month. For all respondents, 44 percent expect to spend more on household expenses such as gas and groceries in the next month, an increase of 6 percentage points from July and the highest number reported for August since 2008. 49 percent plan to spend less on going out to dinner or the movies in the month ahead, an eight-month high and up 2 percentage points from July. 48 percent plan on spending less on home improvement purchases, up 1 point from July. 46 percent plan on spending less on a major purchase such as a vacation, a 2-point increase from July. Consumers were asked for the first time in August how much they plan to spend on back-to-school shopping, with nearly two-thirds indicating they plan to spend less than $250 this year. Specifically, 35 percent plan to spend less than $100, and 30 percent plan to spend between $100 and $250. Compared to last year, 38 percent plan to spend the same on back-to-school shopping. Thirty-two percent plan to spend less than they did a year ago, and 29 percent plan to spend more. About Discover U.S. Spending Monitor The Discover U.S. Spending MonitorSM is a monthly index of consumer spending intentions and capacity that is based on interviews with a random sample of 8,200 U.S. adults conducted at a rate of 275 per night. In addition to spending, the survey asks consumers their opinions on the U.S. economy and their personal finances. The Monitor began in May 2007 with a base index of 100. Surveys are conducted by Rasmussen Reports, an independent survey research firm (http://www.rasmussenreports.com). About Discover Discover Financial Services (NYSE: DFS) is a direct banking and payment services company with one of the most recognized brands in U.S. financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company operates the Discover card, America's cash rewards pioneer, and offers home loans, private student loans, personal loans, online savings accounts, certificates of deposit and money market accounts through its direct banking business. Its payment businesses consist of Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation's leading ATM/debit networks; and Diners Club International, a global payments network with acceptance in more than 185 countries and territories. For more information, visit www.discoverfinancial.com. DiscoverMatthew Towson, 224-405-5649matthewtowson@discover.com