Consumer confidence in the future of the economy rose in February to its highest level since 2007, according to survey results released this week by Discover Financial Services.
The company’s U.S. Spending Monitor gauges the spending intentions and overall confidence in the economy by polling over 8,000 people each month. The survey’s index rose to 94.9 in February, up 4.4 points over the previous month, and the highest the index has climbed since October 2007.
“Expectations for the U.S. economy are improving,” according to the report.
Hopes are rising for consumers’ personal finances, too. More than 36 percent of survey respondents say their own finances are either excellent or good, a two-point increase since January and the highest rate in over a year.
There is a less-rosy way to interpret the numbers, of course. Just over half – 52 percent – of consumers say the U.S. economy is poor, and only a third agree that it’s getting better. When it comes to personal finances, only a quarter of respondents say theirs are getting better, while 43 percent say theirs are getting worse.
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And there’s more glass-half-empty news. More than 44 percent of consumers plan to spend more money in March than they did in February, a seven-point increase over January. That may sound like good news for the economy, but it doesn’t appear likely that consumers are feeling flush enough to buy significantly more flat-screen TV’s or rescue the sagging housing markets. Rather, consumers simply expect that inflation will force them to spend more on the basic necessities of life, such as gasoline and groceries.
“Spending next month on household expenses, including gasoline, is most likely to increase,” Discover notes, however, “Despite the coming of Spring break for many consumers, expectations for spending on major personal purchases, like vacations, in the next month remained unchanged from the prior month at 12 percent.”
Fewer than 10 percent of survey respondents said they would spend more money on discretionary things like movies or going out to eat, a two-point increase over January.
Image: Soundfromwayout, via Flickr