ST. PETERSBURG, Fla.—Despite Russia’s invasion of the Ukraine sparking economic ripple effects around the world, member spending remained strong in February, according to the March edition of the PSCU Payments Index.
“Overall consumer spending growth remained strong throughout February, with credit continuing to greatly outpace debit and the Travel and Entertainment sectors experiencing the highest growth once again,” said Karen Postma, vice president of Risk Analytics at PSCU.
In the company’s new Payments Index it takes a “deep Dive” look into the entertainment sector with a particular focus on gambling transactions, which is described as a “small but growing area.”
“As more states have begun to legalize online gambling over the past few years, merchants such as FanDuel and DraftKings are driving accelerated growth in this segment through sports betting activity,” PSCU said. “This growth also presents an opportunity for credit unions to provide their members with education on financial wellness, as legal online sports betting is most appealing to younger demographics.”
Key Takeaways
According to PSCU, key takeaways from the March report include:
- Consumer spending was very strong for both credit and debit purchases in February, with growth in credit (27%) nearly double the growth in debit (14%). “The Travel and Entertainment sectors continue to experience the most growth, while increasing gasoline prices continue to propel the Gas sector. Restaurants continue to deliver impressive results, up 52% for credit purchases and 23% for debit purchases,” PSCU said.
- With online legal gambling has accelerated since 2019 with growth in sports betting, PSCU said consumer education on financial wellness remains key for activities in this sector.
- The Consumer Price Index (CPI-U) for February increased to 7.9%, its highest point since January 1982 and an 0.8% increase from January.
- Continued stronger-than-expected job growth was recorded for February, with 678,000 new jobs. The unemployment rate dropped to 3.8%, approaching the pre-pandemic low of 3.5% in January 2020.
- The credit card delinquency rate increased five basis points to 1.56%. February 2022 results were 38 basis points lower than the pre-pandemic level of February 2019. The continued strong growth in credit purchases over the past three months contributed to the slight rise in delinquencies after 18 months of reductions.