The economy is doing slightly better, and many consumers are responding by spending more.
July demonstrated a dollar volume growth of 3.9%, up from 3.0% June, according to First Data’s SpendTrend, which measures monthly consumer spending activity.
Summer travel accounted for the increase in spending. Hotel and travel spending increased by 7.9% and 4.6%, respectively.
Consumers also spent more money on food and beverages. Growth could be seen at grocery and beverage stores (5.3%) and restaurants and bars (4.4%). First Data says increased drought conditions contributed to a rise in food prices.
What’s not so good news is the fact that consumers are relying heavily on credit cards to make their purchases. Debit cards were the second-most popular method to make purchases, followed by prepaid cards.