The decline of pandemic-era savings raised concern about end-of-year shopping.
Consumer spending grew solidly this holiday season, rebuking concerns of a slowdown and reinforcing positive signals about the U.S. economy as it approaches the end of a tumultuous year.
Buying among shoppers rose 3.1% over the holidays compared to the same period last year, according to data released on Tuesday by Mastercard SpendingPulse, which measures in-store and online purchases from Nov. 1 to Dec. 24 across all forms of payment. The data is not adjusted for inflation.
Robust spending during the holidays appears to have dispelled concern among some economists of a decline. Their fears centered on a drop-off in pandemic-era savings and a rise in borrowing rates for consumer loans such as credit cards.
But a significant reduction of inflation over the past year has delivered some relief for consumers. Strong hiring and resilient wage growth have bolstered shoppers, who account for nearly three-quarters of U.S. economic activity.
“This holiday season, the consumer showed up, spending in a deliberate manner,” Michelle Meyer, chief economist at the Mastercard Economics Institute, said in a statement.
“The economic backdrop remains favorable with healthy job creation and easing inflation pressures, empowering consumers to seek the goods and experiences they value most,” Meyer added.
Spending over the holidays surged fastest at restaurants, where buying amounted to 7.
