Bolstered by strong economic indicators and a positive swing in consumer confidence, US retail sales jumped a healthy 8.8% year-over-year in January 2023, according to Mastercard SpendingPulse™. The credit card company’s January report spotlighted the jewelry and restaurant sectors due to their impressive performances.
Jewelry sales were up 6.5% YOY in January, potentially reflecting early Valentine's Day shopping. The positive January sales stats reversed a slight decline seen in December of 2022.
Jewelry-sector sales were down 5.4% YOY in December 2022, but still very respectable considering the sector was trying to keep up with the off-the-charts December 2021 performance, when jewelry sales increased YOY by 32%.
Eateries had a particularly good holiday season and start to 2023. Coming off a strong year of growth in 2022, spending at restaurants remained a high priority for consumers. That segment registered a 24.2% YOY increase in January.
"Consumer spending remains resilient in the first few weeks of 2023,” said Steve Sadove, Mastercard Senior Advisor and Former CEO of Saks, Inc. “Mastercard SpendingPulse insights show that the overall retail story remains largely positive with January posting a solid month of growth across the country.”
The Mastercard analysts believe consumers have been encouraged by the state of the labor market and rising wages.
"The primary factor driving spending decisions is income – not just income today but the expectation for income tomorrow.” said Michelle Meyer, North America Chief Economist, Mastercard Economics Institute. “The strength in the labor market remains a critical support for consumer purchasing power and we’re seeing this reflected in our SpendingPulse insights for January.”
The US unemployment rate dropped to 3.4% in January 2023, the lowest level seen in 54 years. Meanwhile, the US economy added 517,000 jobs in January, the most in six months.
The Conference Board "Consumer Confidence Index" recently published a revised assessment of how Americans view current business and labor conditions.
Exactly 20.2% of respondents said business conditions were "good," up from 19.2% a month ago, while 48.2% said jobs were "plentiful," up from 46.4%.
Mastercard SpendingPulse™ findings are based on aggregate sales activity in the Mastercard payments network, coupled with survey-based estimates for certain other payment forms, such as cash and check.
Credit: Image by Bigstockphoto.com.