First Data: Consumer spending grows 4.2% in May

Atlanta — Consumer spending in the United States grew 4.2% year-over-year in May 2014, compared to April’s 4.1% year-over-year growth. According to Spend Trend analysis from First Data Corp., spending growth was driven by May’s warm weather, which specifically spurred spending on travel and home improvement.

Gas station spending growth of 3.6% was higher compared to April’s growth of 3.3% and was another key supporting factor in overall growth as gas prices remained elevated compared to the prior year. Retail spending growth of 1.7% marked a slight uptick compared to April’s growth of 1.3% as warmer weather across most regions, with the exception of the Northeast, supported retail foot traffic. Overall retail spending growth in May marked the strongest growth in seven months, primarily driven by spending at building material & supply dealers (6.7% in May compared to 3.6% in April) and furniture & home furnishings merchants (1.4% in May compared to -0.7% in April).  

Average ticket growth of 1.2 % in May gained steam against April’s 0.5% growth, driven by higher year-over-year gas prices, higher food prices and an increase in some leisure-related categories. Retail average ticket growth of 0% was an improvement from April’s negative growth of -1.1% as many retailers returned to full price selling instead of discounting used to boost foot traffic during and after the extended winter.

“A number of factors, including normalized weather, pent-up demand, falling unemployment and rising home prices supported consumers’ willingness to spend in May,” said Krish Mantripragada, senior VP, information and analytics solutions, First Data. “Credit card spending growth continued to be strong and led all other payment types. The surge in spending growth at hotel and travel merchants, building material & home furnishing merchants, where credit is the primary payment tool, was a major driver supported by easing lending standards and payroll growth.”

 

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