Spending, but Cautious: The U.S. Consumer SituationNitin Sumangali |
The U.S. consumer is spending more, but remains cautious about what he’s spending on, focusing on “needs” rather than just “wants.”
That’s the takeaway from MasterCard’s Sarah Quinlan in her June 10 appearance on Bloomberg. Quinlan notes that while MasterCard SpendingPulse indicates that May retail sales growth was 4.4 percent, the strongest since November of last year, the focus of U.S. consumer spending is on non-discretionary items—on the things people need rather than the things they want. Quinlan also mentions that while year-over-year growth is positive, the rate of growth is lower now than compared with 2011. This all points to a recovery, but potentially a slow and long one.
MasterCard has conducted research and is producing a paper that takes a larger and more historical view of the recent history of the U.S. consumer. For example, in 2012, 19 percent of consumers said they were spending more than the year before, up from 14 percent in 2011. At the same time, 32 percent said they were spending less than the year before, down from 42 percent in 2011. There is a budding confidence that allows consumers to spend more, even if they retain a sense of caution about their finances overall. That full report and analysis, available soon on this website, coupled with the recent data about the cautious consumer spending behavior, round out the picture of where the U.S. consumer is today.