May Consumer Spending Shows Healthy Year-Over-Year Growth

Improved weather and greater demand may account for growth.

June 13, 2014

ATLANTA – According to the latest SpendTrend report from First Data Corporation, consumer spending was up in May, compared to previous months, as well as year-over-year. The report 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.

Last month’s spending growth of 4.2%, compared to April’s 4.1%, was driven by May’s warm weather, which specifically spurred spending on travel and home improvement. Related dollar volume growth of 7.1% at Travel merchants was the highest growth in over a year and was up considerably over April’s growth of 5.2%. 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 versus last year. Hotel spending saw growth of 9.3%, a 12-month high, compared to April’s 7%.

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 versus 3.6% in April) and Furniture & Home Furnishings merchants (1.4% in May vs. -0.7% in April).  

“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 vice president of information and analytics solutions at First Data, in a press release. “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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