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Despite some signs of a softening economy, US consumers are still in a spending mood as we hurtle toward the holiday season, according to the Mastercard SpendingPulse. The credit card company’s annual holiday forecast is predicting that US retail sales will increase 7.1% year over year, excluding automotive sales.
That’s very good news, considering last year’s holiday sales hit a record high.
Retail jewelry sales showed no signs of slowing down in September 2022, as consumer spending jumped 6.9% compared to September of 2021 (YOY) and an impressive 67.7% versus the pre-pandemic figures of September of 2019 (YO3Y).
“This holiday season, consumers may find themselves looking for ways to navigate the inflationary environment – from searching for deals to making trade-offs that allow for extra room in their gift-giving budgets,” noted Michelle Meyer, US Chief Economist at the Mastercard Economics Institute. “New job creation, rising wages and lingering savings should have many consumers ready and able to spend.”
Experiential spending continues to rein in consumers’ dollars, according to the survey, as reflected in these sectors showing strong September 2022 YOY gains: Airlines (56.4%), Lodging (38.1%) and Restaurants (+10.9%).
These numbers reflect pent-up demand from consumers, who were forced to hunker down during the prolonged effects of the global pandemic. A shift in consumer spending reflects a need for normalcy, the survey noted.
Overall US retail sales (excluding automotive) increased 11% in September 2022 compared to September 2021, and 24.6% compared to September 2019. The month’s in-store sales picked up 11.1% YOY and e-commerce sales increased 10.7% over that same period.
Consumers’ widespread acceptance of spending online is reflected in the e-commerce YO3Y sales increase of 90.3%.
Mastercard SpendingPulse findings are based on aggregate sales activity in the Mastercard payments network, coupled with survey-based estimates for certain other payment forms, such as cash and check.
Credits: Shopper image by Bigstockphoto.com. Table courtesy of Mastercard SpendingPulse.