Some consumer spending showing signs of improvement
Some areas of consumer spending seem to be rebounding after taking a hit from stay-at-home orders imposed because of the coronavirus.
Overall credit card spending dropped 16% for the week ending May 17, compared with the week that ended May 19, 2019, according to a report on Tuesday from PSCU. That is the fifth straight week of improving results, the company said.
Debit card spending grew from a year earlier for the fifth consecutive week, jumping roughly 9%, according to PSCU. The average debit card purchase amount was up 17%, as the number of transactions fell more than 6%. Consumers are using relief funds to make purchases at grocery stores and other places, PSCU said.
“Our most recent data continues to show signs of improvement, with debit spending remaining positive and credit card spend continuing its steady improvement,” Glynn Frechette, senior vice president of Advisors Plus at PSCU, said in a press release. “While grocery and online purchases remain strong, we have seen continued improvement in the purchase of ‘goods’ – particularly in the home and automotive segments. Consumers are completing larger projects at home and taking care of their vehicles as they start to get back on the road.”
Spending at grocery stores and supermarkets fell by 8% for debit and 11% for credit from May 1 to May 15, compared with the same period a year earlier, according to a report on Wednesday from CO-OP Financial Services. However, “debit transactions continued to rebound, both in size and volume,” probably from Americans receiving stimulus checks, CO-OP noted.
Department stores were still struggling because of the pandemic, and several large retailers, including JCPenney, have recently filed for bankruptcy. From May 1 to May 15, sales fell 38% for debit card and 23% for credit card from a year earlier for this category, CO-OP said.
Discount and hardware stores saw a surge in sales from a year earlier while the sale of meat lockers was also up, according to CO-OP.
Consumers were also turning to Amazon. Credit card purchases at the online retailer were up 63% and debit purchases increased 123% for the week that ended May 17, compared with roughly the same week a year earlier, according to PSCU.