JPMorgan Chase Institute’s Local Consumer Commerce Index Shows a 3.5% Decrease in Consumer Spending Growth in May 2016

Fewer weekend spending days impacts monthly year-over-year growth
rate of everyday spending

WASHINGTON–(BUSINESS WIRE)–Today, the JPMorgan Chase Institute released the Local
Consumer Commerce Index
(LCCI) for May 2016 and showed that,
notably, local consumer spending declined by 3.5 percent between May
2015 and May 2016. The reduction in spend was largely due to the lower
number of weekend “spending days” in May 2016. Local consumer spending
was also impacted by material declines in spending at establishments
like restaurants, grocery stores and stores supplying other retail. The
Index analyzes debit and credit card spending by over 54 million
anonymized Chase customers across 15 major U.S. cities. The magnitude of
this month’s change and its divergence from other related measures like
the Monthly Retail Trade Survey (MRTS) are the result of a few factors,
described here
in detail.

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 financial transactions, LCCI
offers an ongoing, dynamic view of the health and vibrancy of the U.S.
consumer and the places where businesses operate.

The key highlights from the latest Index include:

  • Across the 15 cities, Houston experienced the largest dip in
    year-over-year consumer spending growth at -5.40%, while Atlanta saw
    the smallest drop at -0.15%.
  • In contrast to most months in the LCCI series, May spending by
    consumers between the ages 35 and 44 was a drag on growth (0.6
    percentage points). Spending by consumers over 65 years of age was
    also a drag on growth (1.2 percentage points), continuing a trend
    prevalent in most prior months.
  • Spending on durable goods subtracted 1.9 percentage points from growth
    in May and consistently subtracted more from growth than did the fuel
    price declines in every month in 2016.

“This month’s LCC index identified a significant drop in consumer
spending growth and offers an important and unique lens into the
everyday factors that can impact local commerce,” said Diana Farrell,
President and CEO of the JPMorgan Chase Institute
.

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.
  • It 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.

Contacts

Media:
JPMorgan Chase & Co.
Nicole Kennedy
(215)
864-5732
nicole.kennedy@chase.com