Payment processor First Data released its most recent SpendTrend report, which states consumer spending has increased. In fact, consumer expenditures in July were the highest they'd been in 11 months.
The new SpendTrend report analyzed the period from July 1 to July 31 and compared it to the period between July 2 and Aug. 1, 2013. The company tracks same-store point-of-sale data by credit, signature debit, PIN debit, EBT, prepaid cards and checks in almost 4 million merchant locations in the U.S.
Growth by sector and region
Spending improved in nearly all retail categories, according to First Data. The retail sectors with the highest growth were building material and garden equipment, as well as furniture and home furnishings. Many consumers spent money on plane and train tickets, as well as auto travel for summer vacations, which increased spending last month. However, First Data notes consumers appear hesitant to purchase large-ticket and nonessential items.
The period's dollar volume growth was 3.9 percent compared to June's dollar volume growth of 3.0 percent. For the hotel and travel sectors, the year-over-year increases in the dollar volume growth were 7.9 percent and 4.6 percent, respectively. Food and beverage stores saw a volume dollar rise of 5.3 percent and food services and dining had a volume dollar increase of 4.4 percent in July.
Every region in the U.S. saw a rise in dollar volume except for New England, according to First Data. The Midwest dollar volume improvement was 5.5 percent in July and the West's dollar volume growth was 4.3 percent in July. First Data believes the Midwest may have had the strongest growth because of improving employment conditions.
Every type of payment increased except for checks, which were used 5.7 percent less frequently in July than the month before. Credit saw the biggest increase with 6.2 percent.
Additionally, the U.S. Bureau of Economic Analysis released its findings on Aug. 1, noting personal income increased 0.4 percent in June. The BEA also found personal consumption expenditures increased by 0.4 percent in June, aligning with First Data's information that consumer spending is on the rise.
Looking ahead
According to Krish Mantripragada, the senior vice president of information and analytic solutions at First Data, the company expects to see an increase in consumer spending in August because of back-to-school sales and state-specific tax-free holidays, which encourage shopping.