ST. PETERSBURG, Fla.–Consumer spending continues to show strength, according to the newest edition of the PSCU Payments Index.
In addition to the report showing card payments growth remains strong among its member credit unions, the CUSO has also taken a deeper look at the effects of various economic forces, done a deep dive into this year’s Amazon Prime Day event, and offered insights into competing events from major U.S. retailers Target and Walmart.
“While we did not see dramatic fluctuations in consumer behavior in this month’s Payments Index, spending remains strong, even as continuing uncertainty around the pandemic and the expiration of several pandemic-related benefits have some consumers taking a more cautious, ‘wait-and-see’ approach,” said Tom Gandre, EVP, chief operating officer at PSCU. “This month’s Deep Dive, in which we explore the continued growth of Amazon Prime Day and its competing events at major U.S. retailers, along with accompanying demographic data, showcases PSCU’s powerful data and analytics capabilities. From understanding consumer behavior to providing personalized service, data is – and will continue to be – the key driver of decision making for financial institutions.”
Key Takeaways
Among the key takeaways from the July report:
- While June CPI-U jumped to an annual rate of 5.4%, its largest increase since 2008, assistance from the U.S. Government – approaching nearly $6 trillion since the start of the pandemic – has fueled demand and put substantive impacts on supply chains.
- No dramatic fluctuations in consumer behavior were seen in June, although consumer spending continues to show strength. Continuing uncertainty around the pandemic and the expiration of several pandemic-related benefits have some consumers taking a more cautious, “wait-and-see” approach.
- Card payments growth remains strong, supported by large retailer summer savings events (this month’s Deep Dive). Of the three large retailer summer savings events in June (Amazon Prime Day, Target Deal Days and Walmart Deals for Days), Target posted the biggest percentage of growth in year-over-year purchases over the comparative two-day Prime Day event period.
- Across all three merchants (Amazon, Target and Walmart) by age demographics, we see year-over-year purchases for the summer savings events strongest for Young Millennials (ages 23-30) and Gen Z (ages 18-22). PSCU urged CUs to review this month’s Deep Dive for more detailed purchase, transaction and demographic insights by retailer, which can help credit unions tailor personalized campaigns by membership age groups and card preferences.
- Card Present volume continues to improve, most notably in the Goods and Restaurant sectors, when compared to the start of 2021 for both credit and debit – but still continues to trail Card Not Present growth.
- Credit card portfolio balances (for our same-store population) in June 2021 held relatively steady, with just a 0.3% drop. These balances are down 14% compared to the pre-pandemic June 2019 timeframe.
The full report is available for download here. PSCU said credit unions can also subscribe here to receive updates when the PSCU Payments Index is published each month.