Thursday, February 10, 2011
A recently issued SpendTrend analysis for January 2011 indicates that transaction growth on credit cards was at a 13-month high in January, and year-over-year credit dollar volume growth was the second highest in over a year. The report tracks same-store consumer spending at U.S. merchant locations by credit, signature debit, PIN debit, electronic benefit transfer and check at U.S. merchant locations.
The number of credit card transactions increased 5.9 percent year-over-year in January, while dollar volume growth for credit card purchases grew by 7.2 percent, according to SpendTrend.
In the report, Silvio Tavares, Senior Vice President and Division Manager of First Data Information and Analytics Services, stated, "Consumer spending during the fourth quarter of 2010 and the momentum from the strong holiday season carried over into January."
The SpendTrend report also pointed to year-over-year dollar volume growth increases in January for signature debit (9.7 percent) and PIN debit (5.4 percent) transactions; it also revealed a decrease for payments by check (-10.4 percent).
Meanwhile, figures recently released by the Fed for consumer credit card transactions also showed an increase in December 2010. It's the first time since mid-2008 that consumer credit card spending increased, according to the report.
The Fed report showed consumer revolving credit increased $2.3 billion, at an annual rate of 3.5 percent, to $800.5 billion during the last month of 2010.
One or two months does not a trend make, but increased consumer spending, taken in concert with other signs, could strengthen the notion that the economy is improving.
Joanna Stavins, Senior Economist and Policy Advisor for the Federal Reserve Bank of Boston, refrained from sweeping predictions on economic recovery, but she said she is happy to see the increase "because that is an indication that people are more optimistic. It's a self-fulfilling prophecy in many ways: as long as consumers are feeling more confident … that might indicate other things are going to improve."
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