National Retail Federation CEO Matt Shea analyzes consumer spending and the retail industry as shoppers hit stores across the country for Black Friday.
Americans picked up spending in December during the crucial holiday season, even though they still faced high interest rates and soaring prices for everyday goods.
retail salesThe Commerce Department said Wednesday that a measure of how much consumers spent on many everyday items, including cars, food and gasoline, rose 0.6% in December. This beat both the 0.4% rise expected by economists in Refinitiv and the revised 0.3% rise recorded in November.
Even excluding the more volatile readings for gasoline and cars, sales still rose 0.6% last month.
The December prepayment amount is not adjusted for inflation, so consumers may end up spending the same amount less cost-effectively.
High interest rate: ordinary deposit interest rate
A shopper browses items at a record store in Atlanta on February 14, 2023. (Dustin Chambers/Bloomberg via Getty Images/Getty Images)
Consumers continued to spend money at car dealerships, grocery stores, building and garden supplies stores, and clothing stores. They also continued to open their wallets the next time. online shoppingspending at non-store retail stores increased 1.5% month over month.
But Americans cut back on spending at gas stations, health and personal care stores, electronics and appliance stores, and furniture stores. Spending at bars and restaurants, the bellwether of discretionary spending, was flat.
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| WMT | Walmart Co., Ltd. | 161.83 | +0.51 | +0.32% |
| HD | The Home Depot Co., Ltd. | 358.89 | +0.47 | +0.13% |
| low | Lowe's Companies, Inc. | 220.43 | +1.52 | +0.69% |
| target | Target Co., Ltd. | 141.07 | +0.16 | +0.11% |
Student loan repayments could hurt major retailers this fall
Last month, sales increased in 8 out of 13 retail categories.
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a solid job market And in recent months, strong wage increases have helped boost consumer spending despite high inflation. But many economists predict that consumers will become more cautious as student loan payments resume and high interest rates affect the broader economy.
Shoppers walk through a store at Tysons Corner Mall on April 2, 2022 in Tysons, Virginia. (Stephanie Reynolds/AFP via Getty Images/Getty Images)
In addition, more Americans are relying on credit cards to cover everyday necessities.
Credit card debt soared to a new record in the third quarter; Delinquency is also increasing.
“Consumer spending during the holidays was exceptionally strong, continuing the trend for the year,” said Ted Rothman, senior industry analyst at Bankrate. “But I'm concerned about how people are paying for all these costs…especially given that the average interest rate on credit cards is at an all-time high of 20.74%. This is a troubling holiday debt hangover. It could become.”
