ST. PETERSBURG, Fla.–A new payments analysis released by PSCU reveals the ongoing effects of the Delta variant and related economic uncertainty, even as its member CUs are seeing increased spending by members.
The data is included in the September edition of the PSCU Payments Index, the goal of which is to “provide information and insights to help financial institutions make informed, strategic decisions on the road ahead,” the CUSO said.
The study also takes a deep dive into the Back-to-School-related merchant categories.
“While consumer confidence reached its lowest level in six months, consumer spending is holding steady with no significant fluctuations reported for the third consecutive month,” said Kenna Smith, vice president of Marketing Operations, PSCU’s Advisors Plus. “As we look at back-to-school shopping trends in this month’s Deep Dive, overall purchases were up year over year, with the largest growth seen in the Sports Apparel category as more students returned to in-person learning and athletic activities this school year. We continue to monitor both economic indicators and spending trends as we progress into fall and the holiday shopping season begins.”
The Key Takeaways
Among the key takeaways in the September report:
- Consumer behavior remained consistent without substantial fluctuations for the third straight month as spending remained strong.
- While the CPI-U for August remained high at 5.3% year over year, it represents a small decline from the July result by 0.1%. The elevated CPI is still causing higher labor and material costs for consumers, although the less-than-expected increase could be a sign of dampening inflation.
- The sunset of the eviction moratorium and supplemental unemployment assistance (CARES Act), along with the August decline in the Consumer Confidence Index, point to a greater likelihood of financial challenges for a portion of the population in the coming months.
- Back-to-school related purchases (this month’s Deep Dive) saw purchases up 18% for credit and 12% for debit as compared to August 2020, when in-person learning was impeded by the pandemic. For these select merchant categories, credit purchases outpaced debit for both Target (credit up 21%, debit up 11%) and Walmart (credit up 12%, debit up 11%).
- Credit card portfolio balances (for our same-store population) in August 2021 held steady, with another 0.2% increase. These balances are down 12% compared to the pre-pandemic August 2019 timeframe. There has been a one percentage point improvement for each of the past two months, PSCU said.
- Card Present credit transactions for August 2021 were up, representing 62% of activity. This is up three percentage points from August 2020 (59%) and still below the pre-pandemic August 2019 levels (of 68%). Card Present debit transactions remained close to August 2020 levels, finishing at 71%.
The full report is available for download here.