Dive Brief:
- Consumer spending experienced 4% year-over-year growth in July, an increase from the 1.9% rate in June, according to Fiserv’s July SpendTrend report monitoring mainly card transactions. In July, transactions in the retail sector overall rose by 4.2%, a 12-month high for the category, the payment processor said.
- Leisure transactions saw the biggest growth at 31.9%, followed by travel at 19.3% and services at 9.6%, according to Fiserv’s analysis of card-based purchases.
- Among retail transactions, the electronic and appliances category and the sports, hobby, book and music stores segment saw the largest increases at 15.3% and 14.8%, respectively. The furniture and the non-store retailer categories declined the most at 13.1% and 9.7%, respectively, according to the report.
Dive Insight:
Fiserv’s findings align somewhat with the U.S. Department of Commerce’s analysis released Tuesday. Excluding food, auto and fuel purchases, overall retail sales rose 5% in July year-over-year. The federal department also reported an 8% decline in furniture and home-related purchases.
In July, average ticket sizes continued to decline, dipping by 1.5% across all industries and declining by 4.8% in retail, Brookfield, Wisconsin-based Fiserv said. The company attributed that to easing inflation.
Statistics in Fiserv’s report derive from its proprietary data with respect to spending on credit, debit and electronic benefit transfer cards as well as checks in some instances, the company says.
In the retail category, electronics and appliances saw the most significant decline in average ticket size at 14.8%, followed by sports, hobby, book and music stores at 11.8%.
The rise in retail spending comes as credit card debt surpasses pre-pandemic levels. Consumer credit card balances continued to climb, reaching a high of $1.03 trillion in the second quarter, according to the most recent analysis from the Federal Reserve Bank of New York’s Center for Microeconomic Data. Additionally, the proportion of credit card balances on the verge of serious delinquency was 5.08% in the second quarter, rising from 3.35% in Q2 2022.
In the fourth quarter of last year, consumer credit card balances reached $986 billion, a 6.6% uptick from the previous quarter, according to a New York Fed analysis.
