Consumer spending drives the U.S. economy, and traders closely follow the Department of Commerce’s monthly estimates of retail sales. Beginning this year Wall Street has had a quicker way to keep tabs on how fast the consumer is emptying his wallet. MasterCard Advisors, a unit of Purchase, New Yorkbased MasterCard International, is offering a service called SpendingPulse, which analyzes payments made through the credit card giant in the U.S. to gauge monthly retail sales.
Since launching the product in January, SpendingPulse has released monthly retail sales estimates on the sixth day of the following month, but its new preview service, which became available in August and is based on 85 percent of total MasterCard monthly sales volume, offers an estimate on the first business day of the month. The Commerce Department numbers are not available until 11 to 15 days after the end of the month, and the first revised figures appear 71 to 75 days after month-end.
Since January 2003, when SpendingPulse first began collating data, its estimates have fallen within 0.4 percent of Commerce’s revised numbers, on average, notes Michael McNamara, vice president of research and analysis at MasterCard. “There is a rather extraordinary relationship between the data sources,” he says.
SpendingPulse may be fast, but Scott Krugman, spokesman for the National Retail Federation, a trade group, says that although his organization looks at all the data available on retail sales, “the gold standard is still the Department of Commerce figures,” which are based on all payment types, not just credit card transactions. It just takes a bit longer to mine that gold.
