PSCU Payments Index November 2023: A Deep Dive into Holiday Spending – Part I
As the holiday shopping season commences, year-over-year growth in consumer spending continues to soften with modest increases reported for both credit and debit throughout October. In the November 2023 edition of the PSCU Payments Index, we present the first installment in our annual three-part Deep Dive series on holiday spending, which has displayed lackluster results in the Goods sector and mixed results for large retailers thus far.
Key takeaways include:
- Consumer purchases softened in October and the rate of growth continued to diminish to the lowest point of 2023. Year-over-year growth in debit purchases was up 3.2%, while credit purchases were up 0.4%. Transaction growth finished with debit up 3.2% and credit up 2.1% for the month.
- For credit and debit purchases in October, the largest contributor to growth was the Services sector once again. Goods was the category with the largest offset to credit purchase growth, contributing a 0.8% reduction. For debit purchases, only Gasoline negatively contributed to a year-over-year reduction of 0.4%.
- The Consumer Price Index (CPI-U) was flat in October, while the 12-month rate of inflation was up 3.2%. Shelter costs rose 0.3% in October – half the gain in September – perhaps signaling a changing tide in this sector. Excluding the volatile Energy and Food sectors, the core CPI index increased 0.2% in October.
- Growth in discretionary spending remained positive but softened in October, with debit purchases up 4.0% and credit purchases up 0.6%. Growth in non-discretionary (or mandatory) spending followed a similar softening trend, with debit purchases up 3.1% and credit purchases up 0.4%.
- The holiday season kicked off with sales at the top retailers in early October. Amazon, Target and Walmart jockeyed to lure consumers to early holiday offerings with mixed results. For the month, growth in purchases for the overall Goods sector was down for credit by 2.1% and up for debit by 0.8%.
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