Like a toddler balancing on newly discovered, yet slightly rubbery legs, consumer spending tottered a bit in June, but remained on its feet, poised to tackle its next steps forward. While slower than last month, solid June spending growth in a number of sectors was reported by First Data Corporation, the global leader in payment technology and services solutions, in its First Data SpendTrend analysis for May 31, 2014 through June 30, 2014, compared to June 1, 2013 through July 1, 2013.
SpendTrend tracks same-store point-of-sale data by credit, signature debit, PIN debit, EBT, closed-loop prepaid cards and checks from nearly four million merchant locations serviced by First Data.
A slowly improving economy and growing job market have helped drive consumer spending. Spending growth in June slowed slightly from May but remained positive on a year-over-year basis with a growth of 3.0%. While spending in Travel and Hotel slowed from the previous month, growth was still strong in these sectors, with a year-over-year increase of 4.9% and 7.1%, respectively. Food and Beverage Stores spending was up 4.7% vs. May’s 4.2% growth, a trend reflecting an increase in food costs.
Retail spending growth retreated slightly in June compared to May but remained positive with 1.2% growth. 5.7% growth in Building and Gardening Materials and 1.5% growth in Furniture and Home Furnishings reflect continued improvement in the housing market. However, a slowly declining unemployment rate caused consumers to remain hesitant and kept overall retail spending growth moderate.
Average ticket growth also decreased slightly from May but remained positive at 0.9% growth on a year-over-year basis, reflecting increased food and gas prices. Food and Drinking Places and Food and Beverage Stores saw a growth of 2.5% and 1.5%, respectively, as rising food costs impacted the average ticket in these categories for consumers.
Finally, credit spending continued to be the preferred spending method this month with a 5.3% increase in transaction growth and a 3.9% dollar volume growth. The increase in transaction volume was supported by year-over-year growth in categories such as Hotel and Travel, where consumers tend to utilize this payment method most.
“This month’s trends showed some slowing in spending growth but overall, spending remains healthy, reflecting the recovering economy and consumer willingness to spend compared to the same time last year,” said Krish Mantripragada, SVP, Information and Analytics Solutions, First Data. “An increase in credit usage reflects steady growth in credit lending, improved consumer credit quality and a growing consumer confidence in their personal finances.”