JPMorgan Chase Institute’s Local Consumer Commerce Index Shows a 3.5% Decrease in Consumer Spending Growth in May 2016
August 24 2016 - 1:18PM
Business Wire
Fewer weekend spending days impacts monthly
year-over-year growth rate of everyday spending
Today, the JPMorgan Chase Institute released the Local Consumer
Commerce Index (LCCI) for May 2016 and showed that, notably, local
consumer spending declined by 3.5 percent between May 2015 and May
2016. The reduction in spend was largely due to the lower number of
weekend “spending days” in May 2016. Local consumer spending was
also impacted by material declines in spending at establishments
like restaurants, grocery stores and stores supplying other retail.
The Index analyzes debit and credit card spending by over 54
million anonymized Chase customers across 15 major U.S. cities. The
magnitude of this month’s change and its divergence from other
related measures like the Monthly Retail Trade Survey (MRTS) are
the result of a few factors, described here in detail.
This report provides a timely view of how the following cities
and surrounding metro areas are faring economically both
individually and in aggregate: Atlanta, Chicago, Columbus, Dallas,
Denver, Detroit, Houston, Miami, Los Angeles, New York, Phoenix,
Portland (OR), San Diego, San Francisco and Seattle. By looking at
actual financial transactions, LCCI offers an ongoing, dynamic view
of the health and vibrancy of the U.S. consumer and the places
where businesses operate.
The key highlights from the latest Index include:
- Across the 15 cities, Houston
experienced the largest dip in year-over-year consumer spending
growth at -5.40%, while Atlanta saw the smallest drop at
-0.15%.
- In contrast to most months in the LCCI
series, May spending by consumers between the ages 35 and 44 was a
drag on growth (0.6 percentage points). Spending by consumers over
65 years of age was also a drag on growth (1.2 percentage points),
continuing a trend prevalent in most prior months.
- Spending on durable goods subtracted
1.9 percentage points from growth in May and consistently
subtracted more from growth than did the fuel price declines in
every month in 2016.
“This month’s LCC index identified a significant drop in
consumer spending growth and offers an important and unique lens
into the everyday factors that can impact local commerce,” said
Diana Farrell, President and CEO of the JPMorgan Chase
Institute.
The LCCI offers unique advantages over existing measures of
consumer spending.
- The LCCI captures actual transactions,
instead of self-reported measures of how consumers think they
spend.
- The LCCI provides timely data on
spending in 15 major metropolitan areas; such geographic
granularity is unavailable in most other spending measures. These
15 cities mirror the geographic and economic diversity of larger
metropolitan areas in the United States and account for 32 percent
of retail sales nationwide.
- It also presents a more granular view
of local consumer commerce through five important lenses: consumer
age, consumer income, business size, product type, and consumer
residence relative to the location of the business. For each lens,
we show how different segments contributed to year-over-year
spending growth.
- The LCCI captures economic activity in
sectors that previously have not been well understood by other data
sources. These include sectors such as food trucks, new merchants,
and personal services.
Each release of the LCCI will describe the economic picture of
local communities and provide a powerful tool for city development
officials, businesses, investors, and statistical agencies to
better understand the everyday economic health of consumers,
businesses, and the places they care about.
About the JPMorgan Chase Institute
The JPMorgan Chase Institute is a global think tank dedicated to
delivering data-rich analyses and expert insights for the public
good. Its aim is to help decision makers – policymakers,
businesses, and nonprofit leaders – appreciate the scale,
granularity, diversity, and interconnectedness of the global
economic system and use better facts, timely data and thoughtful
analysis to make smarter decisions to advance global prosperity.
Drawing on JPMorgan Chase & Co.’s unique proprietary data,
expertise, and market access, the Institute develops analyses and
insights on the inner workings of the global economy, frames
critical problems, and convenes stakeholders and leading thinkers.
For more information visit: jpmorganchaseinstitute.com.
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Media:JPMorgan Chase & Co.Nicole Kennedy(215)
864-5732nicole.kennedy@chase.com
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