Consumer credit and debit spending on travel and entertainment remains down year-over-year, but retail spend is continuing to strengthen, the CUSO PSCU said in its latest weekly transaction report.
The report, which compared the week ending June 7 with the same period last year, said credit spend on travel was down about 64% and debit spend down about 33%. Credit and debit spending on entertainment were down year-over-year 53% and 43%, respectively. The dip has been attributed to local, state and federal restrictions imposed at the start of the pandemic.
Still, the PSCU report said debit card spend was up 16% for the week, the eighth consecutive week of growth. Overall, transactions were down 1.6%, but the report said transactions have shown improvements for 10 weeks straight.
“Debit spend led the way again this week, returning to levels not seen since the COVID-19 pandemic buying spree in early March,” Glynn Frechette, SVP of Advisors Plus at PSCU, said. “The continued strength in debit was fueled by particularly strong growth in retail goods, including home and automotive. Credit card spend and transactions, while still negative year-over-year, showed a notably strong improvement since last week — also one of the strongest we’ve seen in credit since the early weeks of the pandemic.”
Reuters reported Tuesday that a new monthly report from the U.S. Commerce Department is expected to show U.S. retail receipts increased 8% in May. “That would exceed the previous record increase of 6.7% in October 2001 as Americans resumed spending following what was then a record pullback in the aftermath of the September 11, 2001, attacks on the United States,” Reuters reported.
Year-over-year, according to the latest PSCU report, credit card spend was down about 7%, and transactions were down about 12%. “The weekly improvements in credit were one of the strongest seen since the early effects of the pandemic in March,” the latest transactions report stated.
The PSCU report said consumer spending on groceries “continues to perform well,” according to PSCU. Debit purchases were up 14% the first week of June, and credit was up 13.5%. Electronics, home, discount stores and automobiles showed strong consumer spend, the latest report said.
Consumer transactions in “hot zones,” the areas hardest hit by the coronavirus — including California, New York, New Jersey and the District of Columbia—were down about 13% for credit and up about 7% for debit, according to the latest report.
Withdrawal transactions at ATMs were down about 24% year-over-year, according to the PSCU report. Withdrawals have been down more than 20% for 11 weeks, the report said, “indicating less of a preference and desire for cash.”
The advocacy group ATMIA has outlined a “cash revival” plan to help combat the sharp downtown brought on by the pandemic.