NEW YORK (MainStreet) The harsh and severe weather continued to dampen consumers' enthusiasm for spending in February, according to First Data's report.
As the frigid temperatures lingered and continued into February, the volume of spending was at 2.4%, a slight decline compared to 2.5% in January, reported First Data, an Atlanta-based payment technology and services company, which tracked sales by credit, debit and prepaid cards and checks from almost four million merchant locations.
An uptick in spending increased toward the end of February as temperatures rose and consumers started receiving their tax refunds, especially since refund volumes and values were slightly up compared to 2013.
While consumers were making purchases, they were driving less as gas station volume fell by 6.6%. Spending remained healthy at hotel, travel, food services and drinking places at 5.4%, 3.3% and 4.7% compared to January's growth of 5.4%, 2.3% and 3.3% and buoyed the overall growth.
"Consumer spending growth was again unfavorably impacted by severe weather across the nation, which hindered shopping activity for most of the month," said Krish Mantripragada, senior vice president of information and analytics solutions for First Data. "Credit card spending growth continues to be strong as consumer confidence remains pinned near post-recession highs, which has fueled consumers' appetite for credit and should support more spending growth."
"It does seem that February's outlook and enthusiasm for shopping was tepid at best," he said. "In Boston, March continues to be cold and dreary, but sales are brisk. We are expecting an increase of 25% this month. Perhaps this can be attributed to the longer days and optimism that come with this time of year. It is difficult to predict consumer behavior since the last holiday season we had record sales even with the shortened season."