Last updated on August 1st, 2023 at 03:28 pm
Consumer behaviour in the U.S.
Spending is cooling as more americans look for value.
Spending in the US had a strong begining in 2023 with debit and credit card spending showing a 5% yearly increase, then moderated in March and softened further in April, informed by Bank of America “Consumer Checkpoint” publication. This information shows consumer moderation and americans being more cautious in their spending as some of the largest US retailers showed in their 1Q23 earnings release that there was a stronger consumption from wealthier americans looking for more value, Walmart reported larger spending in groceries and a decrease in general merchandise, Target reported lower sales in consumer discretionaries, this showing consumers are watching their budgets closer. Americans are known to rely heavily in debt and a higher interest rate environment as we have now will result on softening conditions.
An excess of disposable income in households will drive up consumption in non essential goods and services. Scarcity in money to spend will result on people spending more in essential necesities like groceries, household appliances, etc.
Consumer spending is cooling throughout 2023. Although airline ticket sales point to a very challenging condition this summer travel season of 2023 (May – September) due to staffing shortages. IATA Economics has announced some insights of what demand for passenger travel is forecast. Recovery of summer travel is expected to reach 92% levels seen in 2019 industry wide, this recovery has not been balanced trought the world, in northamerica improvement has reached 99% of 2019 levels while comparably in the Asia – Pacific region only 77% in the same comparison.
Seasonal travel is known to lag economic conditions as many passengers plan their trips in advance. We can expect a very busy season for travelers across the U.S. but we would expect to have a lower than expected post summer condition due to softening demand in discretion consumption.
Thank you for reading. Redacción Wingvest Journal.
© International Air Transport Association, 2019 . Strong ticket sales point to a busy summer travel season. All Rights Reserved. Available on IATA Economics page.
Bank of America Institute, Economic Insights, Consumer Checkpoint, Higher-income pullback, May 10, 2023. https://business.bofa.com/content/dam/flagship/bank-of-america-institute/economic-insights/consumer-checkpoint-may-2023.pdf
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