Consumer spending slowed in June, but remained strong in several sectors, according to First Data Corp., a global payment technology and services firm.
The company's SpendTrend analysis tracks same-store point-of-sale data by credit, signature debit, PIN debit, EBT, closed-loop prepaid cards and checks from an estimated 4 million merchant locations.
Credit spending continued to be the preferred spending method 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 Travel and Hotel, 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, SVP, Information and Analytics Solutions at 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."
Spending growth in June remained positive on a year-over-year basis with a growth of 3.0%. While spending in Travel and Hotel slowed from the previous month, growth was strong in those sectors, with a annual increase of 4.9% and 7.1%, respectively. Food and Beverage Stores spending was up 4.7% vs. Mays 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, 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.