Consumers continued to spend in January even amid inflation and an uncertain economic environment.
U.S. retail sales (excluding automotive) rose 8.8% year-over-year in January, according to Mastercard SpendingPulse, which reports on national retail sales across all payment types.
In-store sales were up 8.9% year-over-year and e-commerce sales increased 8.4%. (Mastercard SpendingPulse reflects nominal spending and is not adjusted for inflation.)
“Consumer spending remains resilient in the first few weeks of 2023,” said Steve Sadove, Mastercard senior advisor and Former CEO of Saks. “Mastercard SpendingPulse insights show that the overall retail story remains largely positive with January posting a solid month of growth across the country.”
Key trends from January are below:
• Restaurant sector shows strength: Coming off the holidays and a strong year of growth in 2022, spending at restaurants remained a top priority for consumers, surging 24.2% year-over-year.
“This remains consistent with trends we saw throughout the holidays and a broader shift of consumer spending on services,” the report noted.
• Jewelry sector experiences growth: After nine months of stagnant growth, jewelry sales increased 6.5% year-over-year, potentially reflecting early Valentine’s Day shopping.
• Housing-related sectors soften: As a result of the decline in home sales throughout 2022, furniture and furnishings sales continued to experience softened growth with many projects limited to home enhancements rather than new builds. Sales in the sector were down 1.2% year-over-year.
"The primary factor driving spending decisions is income – not just income today but the expectation for income tomorrow,” said Michelle Meyer, North America chief economist, Mastercard Economics Institute. “The strength in the labor market remains a critical support for consumer purchasing power and we’re seeing this reflected in our SpendingPulse insights for January.”
Mastercard SpendingPulse findings are based on aggregate sales activity in the Mastercard payments network, coupled with survey-based estimates for certain other payment forms, such as cash and check.
Mastercard SpendingPulse defines “U.S. retail sales” as sales at retailers and food services merchants of all sizes. Sales activity within the services sector (for example, travel services such as airlines and lodging) are not included.