Consumer spending rises in US

17 November 2014

ATLANTA, GA: Consumer spending climbed by almost 4% in the US last month, providing an impressive prelude to the holiday season, according to a new report.

First Data Corporation, the financial services tech firm, stated that a strong Halloween - which also had the advantage of falling on a Friday - contributed to 3.8% year-on-year dollar spending growth in October.

This trend built on an expansion of 3.1% during September, and was driven in part by early holiday shopping, the company revealed.

Average ticket prices rose by 0.7% last month, although the rising cost of gas and a slew of deals and offers from retailers ahead of the holidays meant this figure was down from exactly 1% in September.

Breaking out the numbers by category, the leisure sector saw an annual uptick of 4.6% in October, with recreation and amusement parks fuelling this result.

Food and beverage stores enjoyed a lift of 4.9%, while food services and drinking places registered growth of 6.3% in the same period.

Krish Mantripragada, svp/information and analytics solutions at First Data, struck an optimistic note about the mood of American consumers.

"We're off and running with a strong start to the holiday shopping season as this year, consumers are showing confidence in their early spending," he said. "This confidence, which is buoyed by a lower unemployment rate, made October 2014 a robust spending month."

At the regional level, the Southwest recorded an improvement of 5.4% in October, with new home sales and rising employment guiding the Midwest to an increase of 4.7%.

Credit cards delivered dollar volume growth of 5.5%, a total reaching 3.4% for prepaid, as well as 2.5% for pin debit and 2.1% for signature debit. Cheques, by contrast, logged a modest gain of 0.1%.

Data sourced from First Data Corporation; additional content by Warc staff