Consumers are pulling back sharply on goods spending, Barclays says

 

Consumers are pulling back sharply on goods spending, Barclays says

Consumers are pulling back sharply on goods spending in what could be a troubling signal for the U.S. economy, according to Barclays.

For the first time since 2021, aggregate spending growth on a year-on-year basis in the Barclays U.S. credit card spending database fell below zero, analyst Renate Marold wrote to clients in a Tuesday note. It's been on the decline since the start of this year.

The biggest contraction in credit card spending comes from goods spending. While consumers across all income levels are lowering their spending, the sharpest pullback comes from higher income shoppers.

"[Goods] spending by high-end consumers is falling fastest, with current goods spending nearly 10% below last year's level," Marold wrote. "This may suggest that the higher-income consumers are feeling the pinch in their wallets from inflation and are in the position where reduced discretionary spending on goods is possible."

What's more, the decrease is not due to a smaller set of credit card users as the data had been corrected for any changes, read the note.

"Instead, it could be a more ominous sign for the US economy," Marold wrote.