Spending Retreats as Politicians Argue, First Data Reports
The prospect of renewed Congressional budget fights helped undercut consumer spending last month, according to a report from First Data.
The privately held payments processor which serves a significant number of credit unions, reported that transactions on its cards in September showed overall dollar volume growth only reaching 5.3% in September, down from August's 7.3%.
The processor attributed the slowdown to lower back-to-school shopping activity compared to August, lower year-over-year gas prices and unseasonably warm weather, with the exception of the Northeast, which reduced demand for fall merchandise.
“Consumer confidence also waned during September as another fiscal policy battle in Washington rattled consumers” the processor added.
First Data also reported that almost all categories of retail saw shorter sales in September, with only building material and supply dealers and furniture and home furnishings showing stronger growth.
“Consumer spending growth fell from last month’s growth as back-to-school spending was weaker compared to August, and as the national year-over-year gas discount gap widened,” said Krish Mantripragada, senior vice president for information and analytics solutions at First Data.
“Although spending on credit led all payments, the growth marked a significant slowdown from last month as shoppers were likely more cautious about using credit to sustain spending,” Mantripragada said.