First Data: Taxes, Weather Slow Consumer Spending in February (March 12, 2013)
March 12, 2013
Higher payroll taxes, federal tax refund delays, high gasoline prices and inclement weather that spanned much of the United States dampened consumer spending last month, according to the latest SpendTrend data released by First Data Corp., an Atlanta-based payments processor.
Dollar volume growth slowed to 4.6 percent year-over-year compared to January’s growth of 6.2 percent, according to SpendTrend, which tracks same-store consumer spending by credit, signature debit, PIN debit, EBT, closed-loop prepaid cards and checks at U.S. merchant locations. Dollar volume for closed-loop prepaid spending grew 3.2 percent year over year, while signature debit and PIN debit grew 2 percent and 1.3 percent, respectively.
“The fact that the personal savings rate significantly declined in January and consumers shifted more spending onto credit cards could be a sign that consumers may be overstretched,” said Rikard Bandebo, First Data vice president and economist. Dollar volume for credit card spending grew 7.9 percent in February.
However, Bandebo said there are other factors that could positively impact future spending, such as an improving labor market, steadily rising home values and healthy gains in the equity markets, or factors that could hurt spending, such as the federal budget sequestration.
