Friday, August 9, 2019
The bellwether report found year-over-year electronic transaction growth continues unabated, despite “political uncertainty, lower consumer confidence and a higher overall personal savings rate,” according to Jared Drieling, senior director of business intelligence at TSG.
Drieling expects the upward trend in electronic payments, which include credit cards, debit cards and a range of mobile and digital payment schemes, to drive nationwide economic growth across all regions. New England reported a 7.03 percent increase in dollar volume growth, he noted.
“Spending at gas stations significantly slowed in the first quarter, down to just under 4 percent in year-over-year spending growth compared to 18 percent in the first quarter of last year due to the lower year-over-year gas prices,” Drieling stated. “Consumers appear to be shifting that spend to boost savings or splurge on discretionary categories like restaurants.”
Amy Zirkle, interim CEO at the ETA, credited innovative payments technologies for fueling growth in consumer spending. “The payments technology industry provides merchants with the ability to accept electronic payments and as an industry we are propelling the growth in new ways for consumers to pay,” she said. “Through innovation, the payments technology industry enables safe, secure and easier ways for consumers to pay, which helps drive commerce.”
Contrasting current and previous year quarterly spending, gas stations reflected the most precipitous decrease, according to the report, largely driven by lower gas prices. As Drieling mentioned in his remarks, research indicates consumers are leveraging gas pump savings at such categories as restaurants, general merchandise and building supply retailers.
While economists anticipate an economic slowdown due to escalating trade tensions, the report noted strong first quarter consumer spending in all U.S. regions. Led by New England at 7.03 percent, consumer spending growth included the following metrics: Far West: 4.14 percent; Rocky Mountain: 4.9 percent; Southwest: 5.23 percent; Plains: 4.65 percent; Great Lakes: 5.40 percent; Southeast: 6.81 percent; and Mideast 6.31 percent.
Findings are based on TSG’s Acquiring Industry Metrics platform, which examined 3.7 million merchants and more than $1 trillion in annualized consumer spending. The quarterly report provides a comprehensive look at same-store sales and consumer spending behavior, ETA and TSG representatives stated.
Findings are consistent with data released by the U.S. Bureau of Economic Analysis, which reported that current–dollar GDP increased 3.8 percent, or $195 billion, in the first quarter to a level of $21.06 trillion.
BEA research, released June 27, 2019, in a report titled Gross Domestic Product, First Quarter 2019 (Third Estimate); Corporate Profits, First Quarter 2019 (Revised Estimate), attributed the increase to “positive contributions from exports, PCE, nonresidential fixed investment, private inventory investment, and state and local government spending that were slightly offset by a negative contribution from residential fixed investment.”
BEA officials also reported domestic financial corporation profits increased by $1.4 billion in the first quarter. “Profits of domestic nonfinancial corporations decreased $68.1 billion, in contrast to an increase of $13.6 billion,” they stated. “Rest-of-the-world profits increased $7.4 billion, compared with an increase of $1.9 billion. In the first quarter, receipts increased $13.8 billion, and payments increased $6.4 billion.”
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