Consumers are absorbing record-high inflation that has driven up the prices for essential goods as well as luxury items as well as travel, according to the results of the latest Mastercard’s SpendingPulse survey released last week.
SpendingPulse measures U.S. online and in-store retail sales across payment types. Retail spending in June, excluding automotive, rose 9.5% on a year-over-year basis, as consumers spent more on necessities such as food and fuel. Excluding auto and gas, sales jumped 6.1%.
In-store spending in June rose 11.7% over last year while e-commerce sales grew at a slower 1.1% pace, excluding auto and gas expenditures, according to Mastercard. Nonetheless, e-commerce spending last month was still about double its June 2019 level, the card company said.
The survey reflects nominal spending, and unlike some government data, isn’t adjusted for inflation.
Meanwhile, consumer prices have been moving up. The Consumer Price Index surged 8.6% during the 12-month period ending in May, according to a release from the Bureau of Labor Statistics last month. That’s the biggest increase in the closely followed metric since December 1981, when Republication Ronald Reagan was president. The current occupant of the White House, Democrat Joe Biden, has made taming inflation his top priority.
Consumers also are paying more for everything from fuel and convenience-store items (42%) to groceries (14%) and higher-end discretionary goods, such as jewelry (16.2%), luxury merchandise (4%) and furniture and furnishings (4.2%), according to Mastercard.
“Sector by sector, we’re seeing a varied picture of how inflation is impacting essential versus discretionary consumer spending,” Steve Sadove, a Mastercard senior advisor who is also the former CEO and chairman of the department store company Saks, said in the press release. At department stores, spending was also higher (8.6%), the survey showed.
“One notable highlight is that travel sectors such as airlines and lodging continue to show signs of strong demand,” Sadove said in the release. Indeed, Mastercard found spending on airlines rose 18.2% in June on a year-over-year basis while lodging gained 33.7%.