US household spending rises 4.9%, lower-income households lead growth: BofA
New Delhi, October 23
US consumer spending remained firm in the week ending October 17, with total credit and debit card spending per household rising 4.9 per cent year-on-year, even as spending patterns diverged across income groups and several discretionary categories weakened, according to a report by Bank of America Securities.
The report said lower-income households had consistently recorded stronger spending growth than higher-income households over the past several weeks, pointing to a continued difference in consumption trends across income groups.
"Lower-income spending growth has consistently outpaced higher-income spending growth over the past several weeks," the report said.
The data are based on Bank of America's aggregated credit and debit card transactions and measure changes in average spending per household.
Excluding gasoline, card spending increased 3.7 per cent year-on-year in the week ending October 17. Retail spending excluding automobiles rose 3.8 per cent, while total online retail spending grew 5 per cent. Spending at physical retail stores increased 3.1 per cent.
Among major categories, airline spending rose 9.1 per cent year-on-year, while spending at restaurants and bars increased 3.3 per cent. Spending on gasoline recorded the sharpest increase, rising 25.8 per cent.
However, entertainment spending declined 4.3 per cent year-on-year, marking a reversal from positive growth earlier in the week. Spending on furniture fell 5.4 per cent, while department store spending declined 3.8 per cent.
The report noted that department stores recorded the biggest improvement in year-on-year spending growth compared with the previous week, while entertainment saw the largest decline. Department store spending, however, remained below its year-earlier level.
Grocery spending also fell 0.9 per cent, while clothing spending was nearly flat, increasing 0.1 per cent. General merchandise spending rose 4 per cent.
The report's findings suggest that overall consumer spending growth remained positive through mid-October, but differences across income groups and categories will remain important indicators of the strength and breadth of US consumption in the coming weeks.
— ANI
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