WASHINGTON--(EON: Enhanced Online News)--Today, the JPMorgan Chase Institute released its Local Consumer Commerce Index (LCCI) for October 2016, which showed that five of the 15 U.S. cities analyzed saw positive growth in year-over-year spending. However, overall, year-over-year consumer spending growth declined by 0.3 percent in October – making it the fourth consecutive month of negative growth.
“Large businesses helped drive this change, as did ongoing spending growth from millennials and low income consumers. We are hopeful that November and December brought continued increases thanks to local holiday spending.”
Denver continued to experience the fastest growth of all cities studied, this time at 7.9 percent year-over-year. Across all 15 cities, growth contributions from large businesses rebounded significantly from September 2016, adding 1.2 percentage points to overall growth. However, this rebound was offset by declines in growth contributions from small and medium businesses.
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 anonymized financial transactions, LCCI offers an ongoing, dynamic view of the health and vibrancy of the U.S. consumer and the places where businesses operate.
“Despite a slight contraction, October 2016 brought some positive developments in local consumer commerce,” said Diana Farrell, President and CEO of the JPMorgan Chase Institute. “Large businesses helped drive this change, as did ongoing spending growth from millennials and low income consumers. We are hopeful that November and December brought continued increases thanks to local holiday spending.”
The key highlights from the latest Index include:
- Smaller cities, such as Seattle, San Diego, Denver, Portland, and Columbus, continued to grow faster than mid-sized and large cities, with a 2.1 percent overall average growth rate in October 2016.
- The top forty percent of consumers – from an income perspective - continued to be a drag on growth in October 2016, slightly overshadowing the positive growth contributed by the bottom sixty percent in that month.
- Small business growth contributions fell sharply in October 2016, subtracting 0.5 percentage points from growth in that month. This is a significant decline relative to the 2.3 percentage point contribution in September. This is only the fourth time in our series that small businesses have detracted from growth.
- Large businesses recovered significantly from the 2 percentage point subtraction from overall growth in September 2016, contributing 1.2 percentage points to growth in October.
- With a contribution of 0.9 percentage points, year-over-year spending growth on nondurables, such as office supplies and clothing, recovered in October after the decline experienced in September 2016.
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.
- The index 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.