St. Petersburg, Fla., Sept. 17, 2021—Today, PSCU – the nation’s premier payments credit union service organization (CUSO) – published 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.
In this month’s iteration, PSCU focuses on the ongoing impacts of the Delta variant, which are posing some renewed economic uncertainty. We continue to see increased consumer spending, even as consumer confidence dropped to its lowest level (95.2) since February. The S&P 500 reached a record high earlier this month, topping 4,500, while the Consumer Price Index (CPI) remained elevated at 5.3% for August. The study looks at the impact of these forces and 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.”
A sampling of key takeaways from the September report includes: 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.
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 or can be shared as a PDF upon request. Additionally, feel free to subscribe here to receive updates when the PSCU Payments Index is published each month.
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Source: Company press release.