2021 Is The Year Of The Consumer

The only two times the retail sales report beat estimates by more than this were in June 2020 and after September 2001. Total yearly retail sales growth rose from 2.5% to 7.4%. That’s the highest growth since September 2011. The table above breaks down the monthly results. As you can see, a lot of the old spending trends remained, but some new trends perked up. Electronics & appliances spending growth was 14.67% and furniture spending growth was 11.97%. However, their yearly spending growth fell during the month according to card data.

Keep in mind, the first half of January and the second half were dramatically different. In the first half, it was uncertain how quickly the vaccines would be given out and what their impact would be on hospitalizations. In the second half, it became very clear the vaccines were being distributed rapidly and that they were causing hospitalizations to fall dramatically. Consumers are now hotly anticipating a return to normalcy within a couple of months. 17.3% of Americans have been vaccinated. Extreme weather is slowing down the vaccination rollout, but that should stop within a few days. On the other hand, bars & restaurants had a monthly growth of 6.93% which beat the average. That’s a new trend which is going to accelerate rapidly this spring. NY already allows for 25% occupancy in restaurants again.

Baby Boomers To Spend More

Millennials and Gen Z have higher spending growth than older generations for two reasons. The first is that the virus doesn’t affect young people as much as older people. Young people can still spread the virus so they should be cautious. However, realistically many aren’t as cautious as older people. The second reason is younger people have less wealth than older people. Those in the lower-income class have less discretionary spending to cut, while the upper-income class has much to cut. Typically, retired people, who have money saved up, spend a lot on travel. That isn’t back yet. As you can see from the chart below, Millennials & Gen Z are spending 3.1% more via Chase cards than last year.

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