First Data: Slow Spending Growth in December (Jan. 10, 2013)
Jan. 10, 2013
Down-to-the-wire drama over the U.S. economy and the “fiscal cliff,” lasting effects of Hurricane Sandy and relatively modest retail discounts during the holidays are likely contributors to December having the lowest monthly dollar volume growth in three years, according to the latest SpendTrend data released by First Data Corp., an Atlanta-based payments processor.
Dollar volume growth last month was 4 percent, much lower than the typical range of 6 to 10 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 1.8 percent year over year, while signature debit and PIN debit grew 3.4 percent and 4.4 percent, respectively.
“Consumer spending took a big step back as concerns related to the fiscal cliff and the initially frugal discounting strategies by retailers dampened holiday spending,” said Rikard Bandebo, First Data vice president and economist. “Looking forward, consumer spending growth may slow as new fiscal policy is enacted in January and consumers take a small hit from the end of the payroll tax holiday. Fortunately, many consumer fundamentals are holding up well: job growth is steady, gas prices are falling, the housing market continues to turn the corner and equity prices have also held up.”
