Retail sales slow to 3% YOY growth according to US consumer spending report

USspeanding

Consumers remaining cautious

 The latest SpendingPulse report released by MasterCard Advisors provides a glimpse into US consumer spending trends from September. According to the report, total U.S. retail sales continued to weaken after peaking at 4.7% in June of this year. September retail sales were up only 3% year-over-year, which was attributed to a significant drop-off in gasoline spending and no major growth in other sectors.

“The government shutdown could impact businesses and consumers in so many ways – fortunately, our monthly SpendingPulse report can help fill a critical void for companies that depend on having an accurate and timely view of consumer spending,” said Sarah Quinlan, Senior Vice President, Market Insights for MasterCard Advisors. “Our insights into consumer spending have always been released ahead of the government figures with 99.86% correlation to the Commerce Department. As retailers head into the busy holiday shopping season, we will continue to be a reliable source for companies to help guide their business decisions.”

Other notable economic trends and news from the September report include:

  • Shoppers Find Retail Therapy Online – While gas demand is down, e-Commerce sales were up by double digits over last year, an indication that shoppers are finding deals online instead of driving to local stores.
  • Clothing and Accessories Take a Hit – The Apparel and Department Store categories were especially hit hard in September, continued evidence that consumers are sacrificing vanity for necessity.
  • Sales of Home Goods Slip – Consumers cut back spending on Hardware and Furniture & Furnishings in September. If the government shut down continues, impacts to the housing recovery may continue to drag down these sectors for months to come.
  • Travel Bounces Back – The Travel sector showed a bit of growth in September, possibly a hint of what’s to come for the economy as consumers make plans for the holidays.

“The ‘feel-good factor’ is hugely important to driving retail sales – when people feel good, they like to shop,” said Quinlan. “There are some definite bright spots in this month’s SpendingPulse report, but overall, consumers remained cautious and continued to search for the best deals, which it seems they often found online. If the government shutdown continues to drag on, it could take a toll on already wary consumers. We will be keeping an eye on how consumers are adjusting their spending habits as our government leaders work to resolve these issues.”

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