Weak Consumer Spending Continues in September but Many Still Find Deals OnlineSarah Quinlan |
While the government shutdown may delay the publication of many important monthly economic indicators such as the Commerce Department’s spending report and the monthly unemployment statistics, there’s no need to play guessing games about the state of consumer spending.
The latest SpendingPulse™ report released today by MasterCard Advisors showed total U.S. Retail Sales continued to weaken after peaking at 4.7 percent year over year growth in June of this year. September retail sales were up only 3 percent year-over-year, which was attributed to a significant drop-off in gasoline spending and to an absence of major growth in other sectors. The Apparel and Department Store categories were especially hit hard in September, displaying continued evidence that consumers are sacrificing vanity for necessity.
Further, consumers cut back on spending for Hardware and Furniture & Furnishings in September. If the government shut down continues, the consequent negative impact on the housing recovery may have a follow on impact dragging down these sectors for months to come.
While there are some definite bright spots in this month’s SpendingPulse™ report, overall consumers remained cautious. They continued to search for the best deals, which they often found online. If the uncertainty generated by the closures in Washington continues, it could take a toll on already wary consumers. We will be keeping an eye on how consumers are adjusting their shopping habits as our government leaders work to resolve these issues.