- Two measures of consumer spending, aggregated from the two biggest credit/debit card network operators, show that Americans are increasing their spending as vaccinations continue and pandemic restrictions ease.
- The Visa U.S. Spending Momentum Index ("SMI") hits 136.0 in April, implying that 65% of consumers are spending more than they did a year ago, while only 35% are spending the same or less. But the SMI hit its lowest point in April 2020 at a reading of 70.5
- Perhaps a better measure is how it compares with April 2019, before the pandemic triggered a sharp recession. In that case, 51% of consumers are spending more, according to the card payments network.
- While the downturn was deeper than the 2008-2009 recession, the recovery has been six months faster, Visa said.
- "The SMI’s latest strong reading provides evidence that consumer confidence is building as the pace of vaccinations increase and restrictions are eased across the country," said Visa Chief Economist Wayne Best.
- Visa launches the monthly SMI readings to the general public this month. Previously, it was only available to Visa clients. The index ranges from 0 to 200, with readings above 100 indicating that consumer spending momentum is strengthening and levels below 100 reflecting weakening momentum.
- The company said the index doesn't reflect Visa operational or financial performance.
- Mastercard's SpendingPulse also shows strong U.S. consumer spending last month, with double-digit growth in in-store and online retail sales across all forms of payment.
- That measure puts U.S. retail sales, excluding automotive and gasoline, climbed 23.3% Y/Y in April and 10.8% from April 2019.
- Sales in restaurants surged 118.8% Y/Y and increased 5.7% from the same month in 2019, Mastercard said.
- E-commerce also continued to grow, with online sales rising 19.9% from April 2020 and 95.6% from April 2019.
- Earlier, the New York Fed said credit card balances fell in Q1 while mortgage debt increased.