• by Jack Loechner , Staff Writer @mp_research, September 30, 2009

According to the American Express Spending & Saving Tracker, the first in a monthly series of reports about consumers' views, 60% of respondents who participated in the study said they intend to spend about the same or more in the next 30 days, (compared to the last 30 days), 40% plan to spend less. Among the respondents who said they would spend less in the next 30 days, the top three reasons were "trying to save money," "reducing debt," and that they "have the money but feel now is not the time to spend."

Among the general population, the greatest number of consumers said their top priority expenses one year ago were vacations (25%) and dining out (24%). Today, only 7% named vacations as a high priority and dining was named as a high priority for only eight%. However health and home expenses, like buying organic food and home maintenance were on the rise even as consumers traded down or out on other items.

So far, consumers are showing restraint when it comes to early holiday shopping. When asked what discount level would motivate them to begin their holiday shopping at retail stores in the next 30 days, 69% said they would not be motivated by a department store discount. Of that group 44% feel it is too early to start holiday shopping, including 52% of affluent and 48% of young professionals.

Pamela Codispoti, American Express Senior Vice President and General Manager, Cardmember Services, says "...  there has been a shift in how consumers are expressing their wants and needs... (they) have taken stock of their financial situation and have a better handle on what their spending and saving plans are in the current economy...  amid their cautiousness we are seeing some areas where people are willing to increase spending."

Comparing their priorities versus one year ago, two significant shifts areapparent:

• Car maintenance showed the single most significant jump in priority (up 37 percentage points). 42% named it as a high priority today, but only 5% said that automobile maintenance and care was a high priority one year ago
• The second highest shift was related to grooming, which rose 28 percentage points in priority. 46% said salon hairstyling and grooming was a high priority today; only 18% of adults said that it was a high priority one year ago

Higher Priority Rating Today vs. One Year Ago (% of Respondents)
	%  of Respondents
Expense	More Important Today	Important One Year Ago
Salon hair styling	46%	18
Auto maintenance	43	5
Private schools	16	6
Home improvements	14	7
Organic food	13	7
Massage	13	6
Source: American Express Spending & Saving Tracker, September 2009

 

Less Important Today vs. One Year Ago (% of Respondents)
	%  of Respondents
Expense	High Importance Today	Important One Year Ago
Pet care	11%	18%
Dining out	8	24
Clothes	8	18
Fashion	7	15
House cleaning service	6	12
Vacation	7	25
Sports activities	5	12
Source: American Express Spending & Saving Tracker, September 2009

Additional key findings included:

• Young professionals were more optimistic about the economy and more likely to increase spending during the next 30 days (24% versus 14% of the affluent and 10% of the general population)
• When young professionals who plan to spend more were asked what they would be spending it on, two thirds said clothing (65%), and more than half said dining out (54%) and travel (53%)
• Among the general population, about one-half of consumers who expect to spend more said they plan to increase their spending on groceries and clothes (49% each)
• The affluent who expect to spend more said it would be on travel (56%), dining out (47%) and clothes (43%)
• When American consumers were asked what they would do with $500 of found money, one-third of consumers said they would pay off their regular monthly bills. One-in-four said they would apply it to pay off credit card debt or save it (26% each).
• 33% of young professionals would put found money toward their credit card debt, compared to 26% of the affluent
• More young professionals than affluents would use the money to go on a shopping spree (16% versus 6%)

Would Spend "Found" $500 (% of Respondents)
Spend On	% Would Spend
Regular monthly bills	32%
Save	26
Pay credit card debt	26
Mortgage/rent payment	11
Splurge at restaurant	10
Buy for others	10
Shopping spree for self	7
Source: American Express Spending & Saving Tracker, September 2009

Assessing consumers' spending plans on large purchases (over $500), young professionals showed the most willingness to spend:

• Only 15% of the respondents in the general population plan to make a large purchase in the next 30 days.
• The spenders were predominantly young professionals (38% versus 24% affluent)
• Young professionals also planned to spend more on those purchases ($2,460) than their affluent counterparts ($2,170)

74% of the general population cited "seeing family and friends affected by the recession" was stated as being the most significant impact of the economic downturn. In fact, says the report, more people cited this reason than "losing their job" (30%), "losses in the stock market" (54%), and "losses in retirement or 401K savings" (56%).

To review the complete AMEX release, please go here.