RANCHO CUCAMONGA, Calif. – Member spending is picking up with summer here, Co-op Solutions is reporting, noting its spending data show that June year over year transaction volume rose by 4.7% in credit and 2.4% in debit.
According to the company, its SmartGrowth team is monitoring the following trends:
Planes, Trains & Automobiles
According to Co-op, the Travel sector continues to see robust growth in 2023, with the overall category posting transaction volume gains of 12.7% in credit and 7.6% in debit year over year in June.
“Although Airline spend has shown more modest increases versus 2022, transaction growth has picked up with the arrival of summer, with month over month gains of 5.2% in credit and 2.5% in debit reflected in June’s data,” Co-op said. “Interestingly, despite a sharp decline in gas prices since June 2022’s all-time peak, transaction volume in the Gas category is down in both debit and credit year over year, supporting the view that more consumers are choosing to travel greater distances for vacation, versus the shorter, drivable trips they favored in the immediate wake of the pandemic.”
Added Beth Phillips, director of Co-op Solutions, “Lower airline ticket prices, a more favorable economic outlook and consumers’ desire for escape to more remote locales are all contributing to the boom in long-distance leisure travel this summer. We expect to see continued strength in the overall travel category through the remainder of the summer season.”
Summer Fun Takes Focus
Co-op noted that even among families that are forgoing vacation travel this summer, leisure and recreation activities are booming.
According to the company, the overall Sport/Recreation merchant category was up 2.0% in credit and 4.0% in debit transaction volume year over year, with notable spikes in the sub-categories of Commercial/Professional Sports, Golf Courses and Recreation Vehicle Rental.
Similarly, the Dining & Entertainment category grew by 5.7% in credit and 3.7% in debit, led by transaction volume increases in arcades, bars, caterers, fast food and restaurants, sports/country clubs, theater and tourist attractions, Co-op said.
“Consumers are really enjoying their recreational activities this year,” said John Patton, senior payments advisor. “Whether it is hitting the beach or the golf course, credit union members are opening their wallets to maximize the good weather and family time.”
Home Improvement Not Improving
After a strong spring for the Home Improvement merchant category, Co-op said transaction volume fell in June.
According to Co-op, the category was down -11.9% in credit and -12.3% in debit month over month in June, putting both into negative territory compared with prior year. Much of this drop was led by the sub-category of Equipment, Parts & Supplies, indicating that the industry has not yet fully recovered from high prices and lingering post-pandemic supply chain issues, Co-op said.
“Slow delivery and high costs of materials are still impacting the home sector,” said Phillips. “In addition, residential real estate sales have slowed considerably due to high mortgage rates, so homeowners are deferring some of these big projects for the time being.”
Softening Job Market Leads to Spike in Employment Agency Spend
Co-op reported that credit transaction volume has accelerated in the Employment Agencies category, rising 65.2% year over year in June.
“This rise mirrors the recent softening in the job market, and an increase in job seekers pursuing better-paying opportunities,” Co-op said. “If the economy does tip into recession, expect volume in this category to continue to increase.”
Slowdown in Credit Card Balance Growth
According to Co-op, following rapid growth in credit card balances through much of 2022, the trend has decelerated in 2023.
Co-op reported its credit union credit portfolio balances were up 14.39% in June 2023 over the prior year, a figure that has slowly declined since hitting a peak growth rate of 15.63% in December 2022.
For additional information, go here.
It’s Called Fresh for a Reason. And We Offer Home Delivery. For Free!
The biggest, best and freshest news reporting in credit unions remains free in ’23! Each morning CUToday.info delivers its daily Fresh Today news update offering the latest headlines and breaking news right to your email, with the easy-to-read headlines format allowing you to click on the stories that interest you most in order to learn more.
If you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time—and it’s free!
Please note that after signing up you may need to go to your Spam/Junk folder and mark the morning headlines email as safe. CUToday.info does not provide its list of readers and emails to outside parties, and we will not be contacting you to sell you an extended warranty or sending you any links so you may cash in on an inheritance you didn’t know was coming.
And did we mention it’s free?
Please note and/or make your IT department or email administrator aware the emails will be coming from the domains CUTodayinfo.com and CUTodayinfoReply.com