Worries about economic weakness have contributed to Wall Street's worst December since the Great Depression, but a new report from Mastercard shows consumers are doing their part to keep the economy going.
The credit card company reports holiday sales rose 5.1 percent to $850 billion, the biggest increase since 2012. E-commerce sales rose 19.1 percent over last year. In the wake of the report, the Dow Jones Industrial Average scored its largest one-day point gain in history, rising nearly 1,100 points on Wednesday.
“From shopping aisles to online carts, consumer confidence translated into holiday cheer for retail,” said Steve Sadove, senior advisor for Mastercard and former CEO and chairman of Saks Incorporated. “By combining the right inventory with the right mix of online versus in-store, many retailers were able to give consumers what they wanted via the right shopping channels.”
Analysts also credit a strong economy and low unemployment for the big increase in holiday spending. Amazon added to the holiday cheer as it reported selling a record number of items throughout the holidays this year.
The company said its best-sellers include Echo Dot, Fire TV Stick 4K with Alexa VoiceRemote, and Echo.
“This season was our best yet, and we look forward to continuing to bring our customers what they want, in ways most convenient for them in 2019," said Jeff Wilke, CEO Worldwide Consumer. "We are thrilled that in the U.S. alone, more than one billion items shipped for free this holiday with Prime.”
Consumers added to their wardrobe
Mastercard reports consumers spent heavily on apparel, with that category growing 7.9 percent over last year. In fact, Mastercard said it was the best year for clothing sales since 2010.
Home improvement spending was up a robust 9 percent while at the opposite end of the scale department store sales dropped 1.3 percent compared to 2017. Electronics and appliances were also lower, falling 0.7 percent. Consumer furniture and home furnishings grew by 2.3 percent.
Mastercard analysts say spending might actually have been higher if not for some bad weather in many parts of the country during the prime holiday shopping period. They point to cold weather on Black Friday morning on the East Coast and wet weather conditions the weekend of December 15-16, on both the East and West coasts.
Weather conditions were also poor on Friday, December 21, in the East, with a number of storms that may have impacted the final frenzy of shopping.