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November Spending Trends: Consumers Remain Cautious as Economy Improves

Co-op Solutions Payments Trends Report (Spending Data from November 1-30)

December 19, 2023 – Amid largely positive economic results, U.S. consumers are taking a cautious “wait and see” approach to the holiday shopping season. Within Co-op’s credit union clients’ payment portfolios, both Credit and Debit transaction volumes fell month over month in November.

The Consumer Price Index (CPI) rose by an 3.1% annualized rate in November, while core CPI (which removes volatile food and energy prices) increased by 0.3% for the month and 4% annually. These figures were in line with analysts’ expectations and reflected a significant easing of inflation from the highs of 2022.

The U.S. posted stronger-than-expected job gains in November, as payrolls grew by 199,000, with the healthcare sector leading the way. This positive lift drove the unemployment rate down to 3.7%, while average hourly earnings increased by 0.4%.

The Federal Reserve held its benchmark borrowing rate, currently at 5.25-5.50%, steady at its December 13 meeting, with expectations rising for a series of cuts beginning as early as March 2024.

Buoyed by these positive economic trends, The Conference Board’s Consumer Confidence Index  bumped up slightly in November to 102.0 from a downwardly revised 99.1 in October, following three straight months of declines. According to the Conference Board, “Despite this month’s improvement, the Expectations Index remains below 80 for a third consecutive month – a level that historically signals a recession within the next year.” The Board also noted that November’s increase in consumer confidence was concentrated within the 55 and up age group, while confidence among respondents aged 35-54 dropped slightly.

Overall, Co-op Solutions credit union portfolio data shows that November transaction volume rose by 4.8% in Credit and 1.5% in Debit on a rolling 12-month basis, while month over month volumes fell by -2.6% in Credit and -4.2% in Debit.

Co-op’s SmartGrowth team members are closely watching the following key spending trends this month:

1. Black Friday Offered Mixed Results. Overall, the period spanning from Black Friday through Cyber Monday boasted impressive results, with a record 200 million shoppers shopping in stores and online. However, the average spent per shopper dipped to $321.41 from last year’s $325.44. And while eCommerce traffic rose strongly to 134.2 million this year versus 130.2 million a year ago, the number of people who visited physical stores fell slightly from 122.7 million in 2022 to 121.4 million this year.

Online shopping continues to grow in popularity, with more than 1 in 4 consumers shopping exclusively online on Black Friday. And for the first time, the majority of such sales were made over mobile devices. According to Adobe Analytics, 54% of Black Friday online sales were conducted over smartphones, an increase of 6% over 2022.

Among the worrisome trends for retailers during this crucial time of year is a continuing decline in toy sales. Hasbro, the maker of popular toys and games including Transformers action figures, Monopoly, and the Dungeons & Dragons fantasy game, announced 1,100 layoffs before the end of the year.

“Spending across sectors continues to tighten, as more consumers gravitate towards Amazon, digital goods and other online retailers,” said Ryan Prentice, Director, SmartGrowth Consulting Services at Co-op. “This narrowing in spend, during a celebrated shopping season, is a further proof point of the importance of digitization across credit union services.”

2. Gen Z Embraces BNPL. While overall holiday traffic at brick-and-mortar retail stores remains soft this season, those who are spending are more likely to use Buy Now, Pay Later (BNPL) than ever before. BNPL is rapidly becoming the go-to financing choice for younger generations, especially Gen Z.

According to a survey from PYMNTS Intelligence, those consumers who used BNPL or other deferred payment options spent 48% more on holiday gifts this year than those who didn’t use such methods.

“The challenge for credit unions is that if consumers are taking advantage of merchant-offered BNPL programs at the point of sale, those transactions won’t flow through their portfolios,” said John Patton, Co-op Senior Payments Advisor. “Not only will they lose out on interchange income, but they won’t be able to view the member’s transaction data, so it won’t help them understand their shopping behaviors and offer the right products to fit their lifestyle.”

3. Travel, Dining Segments Close Out Strong 2023. One of the biggest spending stories of 2023 has been consumers’ return to the levels of travel, dining out and entertainment not seen since before the pandemic.

The Travel category is up 15.4% in Credit and 7.5% in Debit for the 12-month rolling period ended November 2023. Similarly, Dining & Entertainment is up 7.1% in Credit and 3.1% in Debit over the same period.

According to Reuters, industry forecasters predicted U.S. airlines would see an increase of 9% in passenger volume over the Thanksgiving holiday period versus the same period in 2022.

Year-Over-Year Category Level Spending (Rolling Year Average, and Comparing November 2022 to November 2023)

 Credit #TransactionsDebit #Transactions
Category(Dec’21 – Nov’22) vs (Dec’22 – Nov’23)Nov’22 vs Nov’23(Dec’21 – Nov’22) vs (Dec’22 – Nov’23)Nov’22 vs Nov’23
Campers & Camping-9.3%-12.2%-12.8%-14.6%
Digital Goods20.0%30.0%15.7%24.9%
Dining & Entertainment5.4%7.1%2.6%3.1%
Financial Services14.3%18.1%3.9%4.1%
Home Improvement-2.4%3.0%-5.7%-2.8%
Professional Services2.7%4.7%2.9%5.1%
Specialty Retail-4.5%-0.5%-7.7%-5.2%
Grand Total4.8%8.0%1.5%2.7%

What Credit Unions Should Do Now

BNPL is growing in popularity, and credit unions need to get in the game!

Whereas pay-later and layaway-type programs offered through merchants offer consumers a high level of convenience, they can be dangerous, as shoppers tend to spend more on impulse when offered the opportunity to defer payment at the point of sale.

Major card issuers are offering their own versions of pay over time programs, which allow consumers to select recent eligible credit transactions to pay back over several months versus a single billing cycle. Co-op is in the process of rolling out a post-purchase pay over time option that’s integrated with a credit union’s credit card offerings. Pay Over Time Transactions will provide members with the option of splitting payments for qualifying transactions. Credit unions should look to offer such options with their card programs, to keep pace with this popular trend while serving members’ long-term financial wellness goals.

“Another benefit of BNPL and pay over time solutions is that they are great tools for credit building,” said Prentice. “This is just one more reason why credit unions should consider offering such options and packaging them into their financial wellness and educational programs, especially for the Gen Z segment.”

With the New Year right around the corner, it’s also a great time to dust off low-rate debt consolidation and balance transfer offerings to help members who overspend this holiday season. Credit unions may also consider offering a skip a payment program, to help members get back on track in the first quarter of 2024.

More information on the Co-op SmartGrowth Consulting Team can be found here.

About Co-op Solutions

Co-op Solutions is a credit union-owned financial technology platform built using an industry-leading ecosystem, and whose mission is to connect credit unions to the technology, strategic partnership and scale they need to best serve their members and grow now and into the future. Co-op Solutions partners with credit unions to unlock their potential so they can compete; does the hard work of innovation, creating a one-stop opportunity to help credit unions grow; and offers knowledge and expertise in a world where everything must be integrated. Founded in 1981, Co-op Solutions services 2,650 credit union clients, processes eight billion transactions annually, and manages a nationwide ATM network of more than 30,000 and a 5,700-location shared branch network. For more information, visit

Bill Prichard, APR, Director, Public Relations
Co-op Solutions
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