Visa released its June reading of the Visa U.S. Spending Momentum Index (SMI)* and registered 111.7 for June, down 11.6 points from its May reading of 123.3. The reading above 100 suggests consumer spending had expanded year-over-year but at a slightly slower pace than in May.
At its current level, the Visa SMI implies 53 percent of consumers are now spending more than they did one year ago, while 47 percent are spending the same or less. Compared to June 2019, which was not affected by the pandemic and lockdowns, 51 percent of consumers are spending more, down slightly from 52 percent of consumers who were spending more in May. This implies that while the SMI decelerated on a month-over-month basis, the actual downshift in the pace of consumer spending was modest.
“Consumer spending continues to hold up well,” said Wayne Best, Visa’s chief economist. “Although there remains a lot of unevenness between regions, the SMI’s solid reading again in June reflects a continued broadening of the spending recovery across regions of the country.”
Spending momentum, although broadening, remains uneven across regions of the country.
The SMI for the Midwest region continued to lag behind other areas of the country, with an SMI reading of 109.5 in June. For the second month in a row, the West ranked among the region with the strongest consumer momentum at 115.9, as the region lagged in its recovery this time last year.
*The Visa SMI is based on a sample of aggregated, depersonalized VisaNet data and is an economic indicator designed to be a timely gauge of the health of consumer spending. Visa is now publishing components of the SMI on a monthly basis for the general public, in part to help track economic recovery progress.
Photo courtesy Visa