In June, consumer spending faced challenges due to increasing prices for groceries and essential items, as well as elevated interest rates. The latest report from the Commerce Department revealed that retail sales remained unchanged from May, reflecting the impact of these factors on household spending.
The Fiserv Small Business Index, which measures small business performance, declined from 144 in May to 140 in June. Despite this decline, sales improved 2.9% compared to the previous year, indicating positive trends.
However, the slowdown in June was primarily attributed to cautious spending behaviors and reduced average transaction sizes, signaling a shift in consumer habits amidst slowing inflation. Prasanna Dhore, Chief Data Officer at Fiserv, highlighted that consumers scaled back spending and foot traffic across retail, restaurants, and other service-based sectors as the quarter concluded.
While some sectors experienced increased spending, particularly in insurance premiums, summer foot traffic, and subscriptions to web-based content hosting platforms, consumer spending at small businesses decreased in industries such as retail, accommodations, restaurants, ambulatory health care, and professional services.
The Fiserv Small Business Index draws on comprehensive point-of-sale transaction data from approximately 2 million small businesses across the United States. It covers a wide range of in-store and online transactions, including card, cash, and check payments.
