U.S. consumer spending remains strong in July — but not in all categories

Consumers continued to show their resilience in July.

Overall retail spending remained strong in July, up 5.3% year-over-year, according to Affinity Solutions’ Consumer Purchase Insights, based on actual credit card, debit card and transaction data. As inflation continued to cool, spending remained up for all categories — with the exception of electronics, furniture and gas. 

  Demographically, low-income cardholders led middle- and high- income cardholders in July year-over-year spending in most categories, particularly in sporting goods and general merchandise. One exception  building material spending, where middle-income households slightly outpaced low-income households.  

Here are additional insights from the Affinity Solutions report.

•Consumer spending at non-store retailers (including Amazon) continued to outpace growth across all retail categories with a significant 22% uptick versus July 2022.  Somewhat surprisingly, Affinity noted, baby boomers led the pack vs. younger age groups with online retailers outpacing millennial spending by over 9% year-over-year in July.

•Durable goods spending, which is a leading indicator, remains soft compared to overall retail spending, except for gas. 

•Following two months of annual growth, electronics and appliance spending saw a 3% annual decline compared to July 2022, while building materials spending was flat. 

•Furniture spending continued to decline, with a  2.2% drop in spend compared to July 2022.  While down, it’s a marked improvement from the double-digit declines seen in the first quarter, driven by housing-starts going up, according to the report. 

•Sporting goods spending accelerated in the summer season.  Consumer spending on sporting goods, hobby, musical instruments, and book stores rose 17.2%  versus July 2022.  

•As summer continues, consumers overall spent more on sports and hobbies, especially low-income earners.  For example, spending related to hobbies for low-income earners outpaced high-income homes by nearly 12% and middle-income homes by nearly 6% year-over-year in July 2023. 

Affinity Solutions provides a comprehensive view of U.S. consumer spending, across and between brands, via exclusive access to fully permissioned data from more 140 million debit and credit cards.