First Data: Spending Up in Spite of Payroll Tax Cut Expiration (Feb. 12, 2013)
Feb. 12, 2013
Job growth and an improved housing market, among other dynamics, put consumers in a mood to spend in January, despite the Jan. 1 expiration of the payroll tax cut, according to the latest SpendTrend data released by First Data Corp., an Atlanta-based payments processor.
Dollar volume growth last month improved to 6.2 percent compared with 4 percent in December as consumers increased discretionary spending during the start of the year, according to SpendTrend, which tracks same-store consumer spending by credit, signature debit, PIN debit, EBT, closed-loop prepaid cards and checks at U.S. merchant locations. January marked the highest month of growth since August 2012. Dollar volume for closed-loop prepaid spending grew 1.8 percent year over year, while signature debit and PIN debit grew 4.3 percent and 2.3 percent, respectively.
“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, vice president and economist at First Data. “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.”