Spending was up in May, but last month showed some declines. June’s growth was at 3%, down from 4.2% in May.
Even though there has been a slight slowdown, the economy has shown some improvement overall. FirstData Corporation found that there was growth in some key sectors. Travel and hotel spending slowed from May, however, there has been a year-over-year increase of 4.9% and 7.1%, respectively.
In addition, spending on food and beverages was up 4.7% compared to May’s 4.2% growth. FirstData notes that this trend is a reflection of rising food costs.
Furthermore, retail spending growth slightly decreased last month compared to May. However, it stayed positive with 1.2% growth. Improvement in the housing market was reflected in 5.7% growth in building and gardening materials and 1.5% growth in furniture and home furnishings.
First Data says the slow decline in the unemployment rate resulted in hesitance among consumers, thereby keeping overall retail spending growth conservative.
“This month’s trends showed some slowing in spending growth but overall, spending remains healthy, reflecting the recovering economy and consumer willingness to spend compared to the same time last year,” says Krish Mantripragada, First Data’s SVP of Information and Analytics Solutions.