Israelis Continue Spending, But Shift Priorities Amid Economic Trends

Credit card purchase data for May-July reveals a mixed picture of consumption in Israel. While overall spending by private consumers rose 2.2% year-over-year in constant prices, the growth rate has slowed compared to the previous period (February-April), which saw a 5.2% increase. Israelis are still spending, but the pace of expenditure growth is moderating.

The most significant increase was observed in industrial goods, up 5.3%, with clothing and footwear seeing a notable 12.3% rise. Services also grew by 3%, encompassing areas like insurance, travel, leisure, and government services. However, purchases of electrical appliances and electronics decreased by 3.4%, and furniture sales dropped by 1.5%.

A key trend highlighted is a decline in spending on food and beverages, which includes food services. This category saw a 0.8% decrease in May-July, a sharp contrast to a 5.6% increase in the preceding months. This drop, despite food being a basic necessity, may indicate a shift in consumer habits, possibly due to rising living costs, leading to reduced purchases, a move towards cheaper alternatives, or cutting non-essential items.

Within the broader 'other products and services' category, fuel, electricity, and gas purchases fell by 6.8%. Conversely, transportation equipment and services surged by 13.9%, and communication equipment and services increased by 4.1%.

Overall, the data suggests consumers are not stopping their spending but are becoming more selective. While total expenditure is still trending upwards, the disparities across different sectors indicate a change in purchasing patterns, with some daily expenses seeing reduced spending as consumers tighten their belts.