After three consecutive weeks of very little volatility, the Outbound Tender Volume Index (OTVI) showed signs of life, jumping ~4% this week. Besides a pre-Thanksgiving surge last year, OTVI is at an all-time high at 15,871 currently.
According to Bank of America, total card spending was up 45% over last year and up 23% over 2019 for the seven days ending March 20.
The stimulus is providing a huge boost to Americans, who by and large, still remain unable to spend on big-ticket services like concerts, sporting events or amusement parks. The recent stimulus has created the strongest spending gains in furniture, online electronics and clothing. The reversion back to services has not begun in earnest and it appears that consumer balance sheets are in a strong enough position to generate a strong service recovery in the back half while maintaining elevated goods demand throughout the year. The savings rate in the U.S. has come down sharply since the early onset of the pandemic, but it’s still more than double the previous 10-year average.
Yearly comparisons have become increasingly difficult over the past few weeks as we comped over the lockdown-induced panic buying and consumer hoarding that sent OTVI up 30% in 10 days. After adjusting for the extremely high level of tender rejections, OTVI is running up 13% year-over-year.
Last year’s volume surge was gone as quickly as it came. OTVI went from up 30% year-over-year to down 20% in a matter…
