Denmark: Real spending in August is down compared to last year
|Danish card data suggests spending is holding up in the first two weeks of August, at around 9% above 2019 and 2020-levels. Compared to 2021, however, spending is only up 1.9%. Considering the steep increase in prices, this amounts to a real decline compared to last year. That being said, consumers continue to show resilience in the face of an unprecedented erosion of disposable real income and historically low consumer confidence.
Travel spending saw a surge through spring and early summer, as receding Covid fears spurred last-minute holiday planning. In August, this has been replaced by a steady decline in spending, when accounting for normal seasonal patterns. Travel spending is a luxury good, and therefore likely to be affected by weaker household finances. Increasing uncertainty about international Covid restriction during fall and winter is likely to also put a damper on spending.
Restaurant spending continues to perform well, with spending for the first two weeks of august up 8 percent compared to 2021 and 29% compared to 2019.
The mainl weakness is in retail spending. Compared to the first two weeks of August 2021, retail spending is down by 2.9%. Given the increase in prices of notably food and home goods, the decline is significant in real terms. However, last summer still had above-normal retail spending due to Covid. Compared to 2019, nominal retail spending is up 8.4%.
Gasoline prices have moderated since mid-June, which is also visible in the data.
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