Monday, August 21, 2017

Bet you have never heard of the Local Consumer Commerce (LCC) Index. It is going down and that is worrying.

I have never heard of the Local Consumer Commerce (LCC) index. It is created from over 19 billion  credit and debit card transactions from over 59 million consumers in 15 major metropolitan areas in the US.

The index captures year-over-year growth in everyday spending across a range of consumer and merchant groups. The transaction-level data includes the zip codes of both the consumer and merchant so that it can identify local, place-based spending growth (i.e. how much money people are spending within their city of residence).

You can read about the index and see a larger version of the graphic on the J P Morgan web site.

The bottom line of this analysis shows:

Spending growth among consumers 55 and older declined 4.9 percentage points between December 2013 and December 2016.

Restaurant spending growth by consumers 55 and older declined by 8.8 percentage points over the same period.

Growth in spending on other services by consumers 55 and older also declined by 7.2 percentage points.

Why is this happening? My first thought was that older consumer are travelling further afield to spend their money (that might be true). Then I thought that more spend was online, but if this is the case then it would be reflected in all ages.

Another explanation, and one that I think is the most likely, is that older consumers are feeling the financial pinch far more than we realise. The book by Elizabeth White 'Unemployed, over 55 and faking normal' describes this phenomena.

In case you didn't notice, the figures refer to the change in the rate of growth, not the absolute level of growth. Dick Stroud

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