MasterCard sees green shoots in U.S. economy

By Juan Lagorio

NEW YORK (Reuters) - The U.S. economy showed some shy signs of improvement in April, although the outlook for European countries still looks mixed, credit card network MasterCard said on Wednesday.

U.S. sales of discretionary items -- from leisure to luxury goods -- fell by 10 percent to 27 percent in April, while sales of nondiscretionary products such as groceries were flat to higher, according to SpendingPulse, a unit of MasterCard Advisors.

Those figures improved compared to March levels, MasterCard CEO Robert Selander said during an investor meeting at company headquarters in Purchase, New York. "The (economic) decline is slowing."

Still, Selander said things will get worse before they get better until the government stimulus plan starts a sustainable recovery.

Chief Financial Officer Martina Hund-Mejean said U.S. purchase volumes are declining in the second quarter at a higher rate than in the first quarter, when gross dollar transactions volumes fell 8 percent.

However, cross-border volumes reversed the trend of the first three months of 2009 and are stabilizing.

Europe, which entered recession after the United States, is expected to recover later than the world's largest economy. The United States and Europe represent 70 percent of MasterCard's gross dollar transaction volume.

MasterCard, the world's second largest credit card network, is partially insulated from the credit crisis because it processes transactions rather than lends funds. But the company has seen a slowdown of revenue and transaction volumes as consumers used their credit cards less.