Mastercard "US Year-End Shopping Spending Up 3.1%... Increase Halved"

Consumer spending during this year’s year-end shopping season in the United States, spanning from Thanksgiving to Christmas, increased by over 3% compared to the previous year. Despite high interest rates and inflation, consumers are still opening their wallets. However, the growth rate in spending has halved compared to a year ago, raising concerns that consumer slowdown may intensify going forward.

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According to Mastercard’s SpendingPulse survey on the 26th (local time), retail sales excluding automobiles during the year-end shopping period from November 1 to December 24 rose 3.1% compared to the same period last year. This figure falls short of the 3.7% growth forecasted by Mastercard SpendingPulse in September. Compared to last year’s shopping season sales growth of 7.6%, it is less than half. SpendingPulse estimates and publishes retail sales across all payment methods annually based on credit card network data and surveys.

This year’s consumption increase was driven by online shopping. Online retail sales grew by 6.3%, while offline store sales only increased by 2.2%. By category, clothing sales stood out with a 2.4% increase. During the holiday season, restaurant sales rose by 7.8%, and grocery sales increased by 2.1%. In contrast, sales of jewelry and electronics declined by 2.0% and 0.4%, respectively.

Michelle Meyer, Chief Economist at Mastercard Economics Institute, evaluated that “consumers during this year’s holiday period showed a deliberate (cautious) approach to spending.” Although consumers increased their expenditures, they opened their wallets mainly for products and services they judged to have high value, demonstrating a cautious attitude.

In the United States, where consumer spending accounts for about 70% of economic activity, the results of this year-end shopping season carry significant meaning. It is a key signal to gauge the direction of the U.S. economy, a ‘consumer powerhouse.’ Especially locally, considering accumulated monetary tightening, depletion of pandemic-related extra savings, and rising credit card delinquencies, concerns have been mounting that consumer slowdown will intensify starting in the fourth quarter.

Bloomberg reported, “It has been confirmed that U.S. consumers are striving to find bigger discounts during the shopping season,” adding that “Mastercard’s data also showed that consumers pursued products and promotions they considered most valuable, resulting in a slowdown in retail sales growth compared to last year.” The Associated Press also noted, “Ahead of the year-end holidays, concerns about Americans’ spending capacity have grown amid declining savings, rising credit card delinquencies, and increasing prices of essential goods.” Nikki Baird, Vice President of retail technology company Aptos, pointed out to AP that high interest rates and inflation have reduced consumer spending power, emphasizing that the period after January next year will be critical.

Next month, the National Retail Federation (NRF) is expected to release the year-end shopping season results based on Commerce Department data from November and December. Previously, the NRF had forecasted retail sales during this year’s shopping season to increase by 3-4% compared to the previous year.

This content was produced with the assistance of AI translation services.