US Retail Spending Accelerated in June, Bank of America Card Data Shows

U.S. consumer spending picked up slightly in June, driven by a rebound in housing-related categories and the early arrival of major online sales events, according to new data from Bank of America. Total retail spending, excluding gasoline, rose 4.6% year-over-year based on the bank's aggregated credit and debit card transactions, accelerating from a 4.3% increase in May.

Key Spending Trends

While the headline number improved, the data revealed shifts in consumer behavior across different sectors. The bank noted that a drop in gasoline prices, which fell approximately 10% on average from May to June, likely freed up some consumer discretionary income.

Key takeaways from the report include:

• General Merchandise: Spending in this category slowed to a 4.4% increase, down from 5.5% in May. However, Bank of America observed a pickup in online general merchandise sales late in the month, attributing it to major retail events like Amazon’s Prime Days shifting into June this year.
• Groceries: Spending on groceries saw a decline, falling 0.8% in June after posting a 1.5% gain in May.
• Electronics & Hobbies: Spending in the consumer electronics and hobby retail category remained steady, holding at a 9.8% growth rate.

Housing Sector Shows Renewed Strength

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A significant driver of the month's acceleration was the housing sector. Spending on home improvement, which Bank of America uses as a proxy for do-it-yourself (DIY) activity, recovered to post 2.5% growth in June, a sharp reversal from the 1.4% decline seen in May.

Similarly, spending on housing-related services, a proxy for professional services, surged to 8.4% growth, a substantial acceleration from May's 1.5% rate. The bank reported that both of these categories were led by strong performance in the Northeast. While most housing categories improved, roofing, siding, and furniture were exceptions, though online furniture sales accelerated to 7.5%.

Market Implications

The Bank of America data provides an early, unofficial look at the health of the U.S. consumer ahead of official government retail sales reports. The figures suggest underlying resilience, particularly in home-related spending, which could be a positive signal for retailers like Home Depot and Lowe's.

Investors will monitor whether the slowdown in general merchandise and the drop in grocery spending are temporary shifts or signs of more cautious consumer behavior. The data highlights the significant impact of promotional timing on monthly figures and underscores the importance of housing-related activity as a pillar of consumer spending.