JPMorgan Chase Institute’s Local Consumer Commerce Idx Shows a 1.9 Percent Decrease in Consumer Spending Growth in August 2...
December 05 2016 - 9:00AM
Business Wire
Strong increases in spending on services and at
restaurants were not enough to offset reduced spending on fuel and
durable goods
Today, the JPMorgan Chase Institute released its Local Consumer
Commerce Index (LCCI) for August 2016, which showed that all but 3
of the 15 major U.S. cities studied experienced negative growth in
year-over-year spending. Overall, year-over-year consumer spending
growth declined by 1.9 percent in August - the largest dip since
May 2016 and the second most significant decline in year-over-year
growth since October 2013.
Denver experienced the fastest growth of all cities studied at 5
percent year-over-year. Across the 15 cities, consumer spending at
restaurants contributed 0.2 percentage points to growth, along with
spending on services, which contributed more than any other product
type that month at 0.9 percentage points.
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 anonymized financial transactions, LCCI offers an ongoing,
dynamic view of the health and vibrancy of the U.S. consumer and
the places where businesses operate.
“August appears to have brought more of the same trends – with
decreases in spending on durables and fuel and increased spending
on restaurants and services,” said Diana Farrell, President and
CEO of the JPMorgan Chase Institute. “The difference was a very
sharp slowdown in spending at small and large businesses. Growth in
these businesses has tended to offset declines in mid-sized
businesses in recent months, and in August, this growth just wasn’t
there.”
The key highlights from the latest Index include:
- Small businesses contributed an average
of 0.6 percentage points to overall growth over the first eight
months of 2016, but subtracted 0.2 percentage points in August;
while mid-sized businesses subtracted 1.9 percentage points from
overall growth in August. This is the largest reduction in spending
at mid-sized businesses since the beginning of our series.
- Reductions in spending on durables
subtracted more from overall growth than any other product type in
each of the first seven months of 2016. August saw another
substantial drop in durables spending, subtracting 1.5 percentage
points from overall growth.
- Declines in fuel spending also
subtracted 1.5 percentage points from overall growth in August,
continuing an extended period of declining or flat growth that
began in October 2014. These reductions in spending have been
primarily driven by declining fuel prices.
- Spending by consumers that reside in
the same neighborhood as the merchant has experienced a relatively
volatile decline in growth since the end of 2015. Same neighborhood
sales continued their downward trend in August 2016, subtracting
1.1 percent from growth.
- Spending by consumers that reside in a
different metro area than the merchant experienced a rare decline
in May. Since that time, however, growth has stabilized. Spending
by these consumers has added 0.3 percentage points to growth in
June, July, and August.
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.
- The index 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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JPMorgan Chase & Co.Media: Nicole Kennedy, (215)
864-5732nicole.kennedy@chase.com
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