Today, the JPMorgan Chase Institute released its Local Consumer Commerce Index (LCCI) for March 2018, which showed increased spending of 2.3 percent across 12 of the 14 metro areas analyzed. Of the 2.3 percent in year-over-year growth, consumers under the age of 35 were responsible for 1.9 percent of growth, further underscoring their role in a dynamic economy. For the eighth consecutive month, spending on fuel contributed at least 0.4 percentage points to spending growth, spurred on by rising gas prices across the country.
Houston led all cities with 6.1 percent growth, experienced its sixth month of positive growth in the seven months since Hurricane Harvey made landfall in September 2017. Houston, which has a large presence of oil and gas industry, may be benefitting from an upturn in oil and gas prices.
Detroit led mid-sized metro areas with 4.3 percent year-over-year growth, and Atlanta followed closely behind with a 4.2 percent increase. San Diego and Los Angeles were the only two cities to post declines in growth, with 0.7 and 0.1 percent negative growth, respectively.
“Consumers between the ages of 25-34 continue to comprise the lion’s share of economic growth, and they remain vital to the economic well-being of cities,” said Diana Farrell, President and CEO, JPMorgan Chase Institute. “While large businesses continue to experience greater volatility, alternating between positive and negative growth for the past eight months, small businesses continue to be steady drivers of growth, making consistent, positive contributions to consumer spending growth in America’s cities.”
Data visualization of the changes in local consumer spending growth over the last 24 months can be found online.
This LCCI 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-Ft. Worth, Denver, Detroit, Houston, Miami, Los Angeles, New York, Phoenix, Portland (Ore.), San Diego and San Francisco. By looking at actual, de-identified financial transactions, the LCCI offers an ongoing, dynamic view of the financial health of the U.S. consumer and the vibrancy of the places where businesses operate.
Additional key highlights from the latest Index release include:
- Eight of 14 cities experience year-over-year growth greater than three percent.
- Houston continued its streak of positive growth, with year-over-year increases in six out of the last seven months.
- All mid-sized cities posted positive year-over-year growth, with Detroit leading the way at 4.3 percent.
- Consumers in Denver posted the greatest growth among small cities, with 3.8 percent, while San Diego posted the only negative growth rate for small cities at negative 0.7 percent.
- Consumers over the age of 55 subtracted 0.5 percent from year-over-year growth.
- Consumers in the bottom income quintile increased spending 5.7 percent compared to a year ago, while the wealthiest consumers increased spending 0.2% compared to a year ago.
- Spending at small businesses contributed 0.9 percentage points to spending growth, and spending at large businesses contributed 1.0 percentage point. Consumer spending at mid-sized businesses contributed 0.4 percentage points to year-over-year growth.
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 14 major metropolitan areas; such geographic granularity is unavailable in most other spending measures. These 14 metro areas mirror the geographic and economic diversity of larger metropolitan areas in the United States and account for 30 percent of retail sales nationwide.
- The LCCI 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 describes the economic picture of local communities and provides 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.
The JPMorgan Chase Institute is a 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 timely data and thoughtful analysis to make more informed decisions that advance prosperity for all. 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.