Christmas shopping season has been one big bust, data from these 30 million people show
Santa’s sleigh looks like it will be coming down on rooftops this Christmas Eve much lighter than most on Wall Street expected.
At least that’s the hot read from some less-than-cheery new data out of JPMorgan.
Total spending on 30 million Chase credit and debit cards dropped 5.4% year over year from four weeks before Black Friday through Dec. 14. What JPMorgan calls “card-present spending” has crashed 18% from a year ago for the holiday season to date.
JPM senior economist Jesse Edgerton says weak sales reflect people shying away from physical stores amid the COVID-19 pandemic.
“To be clear, holiday shopping is still occurring, and we have seen a major increase in unadjusted spending levels since October. But this increase has fallen short of the typical seasonal pattern,” Edgerton notes.
The lone bright-spot this chaotic holiday season is online spending, but even its growth rate isn’t anything to write home about.
There have been a few bright spots, with a 13.5% increase in card-not-present spending, as consumers shifted to online shopping, and strength in some categories like wholesale clubs and discount stores,” points out Edgerton.
To be sure, the bad news on holiday spending continues to pile up.
The Commerce Department reported on Wednesday that November retail sales fell 1.1%, worse than economist projections. Sales weakened in key categories such as autos, electronic stores, clothing stores and restaurants. Sales in October were revised to a decline of 0.1% from a previously reported 0.3% increase.
This follows softening in the latest reads on consumer confidence.
Meanwhile, spending by consumers receiving unemployment benefits has fallen to its pre-pandemic spending level following the expiration of the $300 supplemental bonus in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Goldman Sachs strategist Jan Hatzius wrote this week. Hatzius’ new data showed a steady decline in spending in recent months as the unemployed likely worked through their savings and stay concerned about income prospects amid the pandemic.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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