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12/09/2011 -
Despite dismal showings in the U.S. labor market, credit card use among consumers expanded in August, spurred in large part by back-to-school shopping, according to First Data's most recent SpendTrend report.The study, released Monday, shows a 12.4 percent surge in credit dollar volume growth in August over a year ago. Similarly, transaction growth expanded by 11.7 percent over August 2010. Both figures mark a 13-month high for the report and may offer a glimmer of hope for consumer spending trends.
According to data from the U.S. Federal Reserve, credit balances have risen in two of the last three months. However, consumers have been devoting much of their credit card use toward non-discretionary purchases such as food and gas.
"In August, consumers were drawn to stores by aggressive back-to-school promotions," said Silvio Tavares, senior vice president and division manager of First Data Information and Analytics Solutions. "These sales increased overall card spending despite lower average prices."
Tavares added that the one exception to this trend was the East Coast, where complications from Hurricane Irene caused a slowdown in card spending growth during the last week of August.
