U.S. consumers continue to spend despite inflation

According to Mastercard SpendingPulse, U.S. consumers are still spending despite high inflation, revealing that in July ecommerce sales were up 11.7% YOY. As well as a sharp increase in online spending, U.S. retail spending excluding automotive increased +11.2% YOY in the same month.

The spending increases seen in July are the highest seen so far in 2022, with demand and higher prices both contributing factors. This increase is likely also helped by U.S. consumers taking advantage of the sales events seen throughout the summer months.

Key findings:

  • Consumers continue to spend, with inflation’s impact varying across sectors: Consumers continue to navigate high inflation as they spend on wants and needs. The Grocery sector, for instance, saw sales up +16.8% YOY in July due primarily to food price increases. On the other hand, Apparel (+16.6%) and Jewelry (+18.6%) sales saw strong demand-driven year-over-year growth, well outpacing sector-specific inflation.
  • E-commerce sales climb amid major promotional events: While in-store sales remain elevated, up +11.1% YOY/ +13.9% YO3Y, e-commerce posted its first month of double-digit sales growth (+11.7% YOY) since December. E-commerce is up nearly double pre-pandemic levels (+98.5% YO3Y). Online sales have ticked up since the beginning of June, though July’s major promotional events helped entice shoppers to splurge (and save) with online deals.
  • High season for vacation, with road-trippers seeing some relief at the pump: Travel remains a priority, with Lodging up +29.6% YOY and Airline sales up+13.3% YOY. Fuel & Convenience spending remains elevated (+32.3% YOY / +47.1% YO3Y), though the growth rate is down compared to June – reflecting price declines at the pump.
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