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 7.8% growth compared to the same period last year, Mastercard SpendingPulse data showed.
