Consumers may be spending more these days, but they're enjoying it less. Significant numbers of Americans believe both their personal finances and the overall economy are worsening, according to a monthly survey. The finding constituted the largest one-month hit to consumer confidence since the survey began in 2007.
Consumer sentiment dropped 4.4 points to 85.1 in the U.S. Spending Monitor produced by Discover, the financial services company. That index reading is the lowest in two years and comes after months of little change in consumer confidence.
Last month, more than 60 percent of U.S. adults rated the economy as poor and nearly 50 percent said it is getting worse. The gloom wasn't limited to the national stage; more than half of respondents reported their own finances were worsening as well.
The drop in confidence came even though there was a 10-point drop in the number of people concerned that they will spend more on household expenses in the following month. Just 43 percent said they expect higher household expenses, which includes groceries and gas .
The one bright light in the June index was home improvements. Despite growing concern over the economy and their personal finances, more consumers said they were planning to spend on home improvements. Slightly more than 18.2 percent planned to spruce up their homes, which is up 1 point from May and is the highest figure for the category since May 2008.
"The recent dip in gas prices did not appear to have any impact on consumers’ views toward their personal finances," said Julie Loeger, senior vice president of brand and product management for Discover. "In the absence of good economic news , such as on the jobs front or with housing prices, more Americans are growing pessimistic about their long-term financial outlook and the outlook for America’s economy generally."