Consumers showed a willingness to spend money in January despite an increase in taxes, First Data said Tuesday, citing results of its monthly SpendTrend report. The report tracks same-store consumer spending via electronic payment cards at U.S. stores.
“The growth was supported by a number of factors including the short-term resolution of the fiscal cliff scenario, growth in jobs, continued improvement in the housing market and the rising stock market,” said Rikard Bandebo, First Data vice president and economist. “However, merchants will undoubtedly keep a close eye on consumer sentiment in the coming months to determine if shoppers will maintain increased spending as the full impact of the payroll tax hike may not be felt until February or even later out.”
Some highlights of the report:
Dollar volume growth improved to 6.2 percent compared to 4.0 percent in December.
Retailing was a big part of that overall dollar volume growth, with retail dollar volume growth at 5.7 percent, the highest since August. First Data said dollar volume growth was more than 9 percent at building material and garden equipment and supply dealers and at sporting goods, hobby, book and music stores.
Average ticket growth was 0.9 percent, an eight-month high and an improvement over December's negative growth.
Consumers turned more to credit cards for discretionary purchases, with credit card dollar volume growth at 9.2 percent in January compared to 4.3 percent in December.