Atlanta -- Consumer spending slowed in June but remained positive on a year-over-year basis with a growth of 3%, according to First Data SpendTrend analysis, which 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.
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% compared to 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; while 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 in June 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, senior VP, 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.”