The Discover U.S. Spending Monitor jumped a record 4.7 points in April to 84.2 (based out of 100), as the number of consumers saying the economy was getting better rose 8 points to 23 percent. In three months this number went from a Monitor low 8 percent in February to a Monitor high in April.

The growing economic optimism among consumers coincided with a sharp drop in the number who thought things were getting worse. In April, a Monitor low 51 percent said the economy was getting worse, 10 points lower than March and 7 points lower than the previous low, 58 percent, set back in July 2007.

The sharp rise in economic confidence appears to be positively affecting consumers’ attitudes about their personal finances. For the first time since September, the number of consumers rating their finances as good or excellent increased to 35 percent. Increasing optimism about the economy and personal finances may be a reason consumers eased up on their spending restraint in April after hunkering down for the last several months.

Half of consumers planning to spend less on discretionary purchases, a 13-month low
In April, 50 percent of consumers planned on cutting back their discretionary spending. While still significant, this is the lowest this number has been since March 2008. Consumers are also showing a little less spending restraint in other areas as well. Fifty percent of consumers are planning to spend less on home improvement purchases, down 2 points from March, and 48 percent are planning to spend less on major personal purchases like a vacation, down 3 points from March and the first time this number has been below 50 percent since September.

“It’s quite remarkable that economic confidence, as measured by the Monitor, went from a low in February to a high in April. There are signs that their optimism may be influencing consumer spending intentions,” said Julie Loeger, senior vice president of brand and product management for Discover Financial Services. “But two months is hardly a trend, and we’ll have to wait and see if their optimism lasts.”

While the number of consumers saying they are planning to spend less in the month ahead went down by 4 points, only 20 percent of consumers say they plan to spend more. This number is 20 points lower than April 2008, when 40 percent expressed similar views.

Less than half have money left over
While economic confidence is on the upswing, the number of consumers saying they have money left over after paying monthly bills fell from 51 percent to 48 percent in April. However, of those consumers who had money left over, 80 percent were expecting to have the same or more money left over, the same as March.

For the fourth straight month, less than 40 percent of consumers said they were expecting an added expense or an income shortfall in the next 30 days.

Economic optimism gives consumers greater confidence in their personal finances
Better views about what lies ahead economically may have given consumers a dose of optimism about their personal finances in April. Nearly 50 percent feel their finances are the same or getting better, a number not reached since February 2008. Not as many consumers believe their finances are getting worse, 48 percent, the first time this number has been under 50 percent since February 2008 and 4 points lower than March.

Consumers also feel that current economic conditions are better than what they were a month ago. While 59 percent of consumers still rate the economy as poor, this number is 6 points lower than March and the first time it has fallen below 60 percent since October.

“Consumers continue to approach their spending with caution, albeit a little less so in April,” said Loeger. “As they grow more confident in the economy and their finances, consumers may boost their spending; which should help with an economic recovery.”

For more Discover U.S. Spending Monitor survey data, charts and information, please visit www.discoverfinancial.com/surveys/spending.shtml.