Continued Growth in Consumer Spending in May Sets Stage for Summer

Transitioning from spring into the summer ahead, American consumers continued spending at a solid pace in May with the strongest spending in travel and home improvement.

Spending growth of 4.2% was up over April’s 4.1%, driven by May’s warm weather in most regions. Hotel spending growth of 9.3% was a 12 month high, spiking vs. April’s 7.0%. Related dollar volume growth of 7.1% at Travel merchants was also the highest growth in over a year and was also up considerably over April’s growth of 5.2%. Overall retail spending growth in May marked the strongest growth in seven months, primarily driven by spending at Building Material & Supply Dealers (6.7% in May vs. 3.6% in April) and Furniture & Home Furnishings merchants (1.4% in May vs. -0.7% in April). Retail average ticket growth of 0.0% was an improvement over April’s growth of -1.1% as many retailers returned to full price selling, moving away from the discounting used to boost foot traffic during and after the extended winter. 

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Rishi Chhabra is vice president of information and analytics solutions at First Data.