Boost in Nov US consumption, spending on holiday items up 1% YoY: BoA

Overall consumer spending growth turned positive, with total card spending per household up by 0.5 per cent YoY, after a 0.5 per cent fall in October.

In general, younger generations' spending growth lagged older generations’ this year. This appears to be playing out in holiday shopping as well, though with some signs that promotion-hungry younger generations started ramping up spending in late November, the Bank of America Institute said in its ‘Consumer Checkpoint’ report.

Fundamentals look largely supportive for younger people, with still fairly decent (if slowing) wage growth and elevated deposits relative to 2019, according to the bank’s data.

Another key theme reported on over the last year has been the relative outperformance of older (baby boomer and traditionalist) generations’ spending growth. The 8.7 per cent 2023 cost-of-living adjustment to social security, which boosted retirement incomes, as well as higher levels of wealth were among the drivers of this outperformance. The bank sees this trend continuing to play out in holiday spending.

While baby boomers saw a solid 2.3 per cent YoY growth in November, both millennials and Gen X consumers had lower holiday spending than in the same 30-day period last year.

In addition to spending less on a relative basis, millennial and Gen X consumers seem to be more promotion-driven, as their holiday spend was more concentrated around Black Friday and Cyber Monday, compared with baby boomers.

Baby boomers’ holiday spending started to pick up from the start of November and continued to rise throughout the month, though this could slow further into the holiday season. Meanwhile, millennials started to ramp up their holiday spending much later in the month.

ALCHEMPro News Desk (DS)