The Discover U.S. Spending Monitor(SM) rose 2.6 points in August to 87.8, the largest ever month-over-month increase in the Monitor’s index history, and its highest reading of 2008. It is the second month in a row that the monthly index has moved upward, largely as a result of easing pessimism about the economy and a hold-the-line approach to spending. While optimism about the economy is starting to trend upward, the Monitor’s Index still lies seven points below the August 2007 reading of 94.8.
The economic component of the Monitor has moved in near lock-step with the retail price of gasoline. In August, gas prices tumbled 37 cents a gallon to levels well below the $4.00-a-gallon average that had been the norm for much of the summer. The price decline correlated with an appreciable improvement in consumer attitudes about the economy as the Monitor’s confidence measure surged more than six points over July. It also marked a shift in spending behavior, with consumers expecting to feel less of a pinch in their budgets next month from household expenses.
Consumers Adopt Hold-the-Line Attitude on Spending
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