The Visa U.S. Spending Momentum Index (SMI) reached a reading of 136 in April 2021, indicating that the U.S. economic recovery remains on steady ground. The Visa SMI implies at its present level that 65 percent of consumers are now spending more than they did a year prior, and just 35 percent are spending the same or less, according to a Wednesday (May 12) announcement.
“The SMI’s latest strong reading provides evidence that consumer confidence is building as the pace of vaccinations increases and restrictions are eased across the country,” Visa Chief Economist Wayne Best said in the announcement. “Signs of economic recovery, additional stimulus payments and optimism that the pandemic is waning are contributing to stronger spending compared to last year and even within recent months.”
However, Visa reported that the gains in spending have remained uneven. The SMI for cities that saw the most substantial job losses in April 2020 has been 1.5 points lower on average during the past year than cities where job losses weren’t as large. For example, the SMI for Chicago, which is among the most impacted cities when it comes to job losses, averaged 100.5 in the past year. By contrast, Atlanta, a city with fewer job losses, had an SMI of 104 during the same time frame. But Visa noted that the gap between Chicago and Atlanta has lessened during the past three months, “helped in part by Chicago’s progress in vaccinating a greater share of its residents.”
“This past year underscores the importance of looking not only at how much is being spent, but also how many consumers are spending,” Best said in the announcement. “What made the most recent downturn and now recovery so different than any previous business cycle was how the pandemic impacted the ability as much as the willingness of consumers to spend. Understanding how many consumers are feeling sufficiently confident and financially secure to spend more is at the heart of what the Visa SMI does.”
The Visa SMI is based on a sample of depersonalized and aggregated VisaNet data, the announcement indicated.
As previously reported, foot traffic at apparel stores is returning to levels that have not been seen since before the pandemic, while U.S. malls are seeing a boom in foot traffic.
May 12, 2021 at 03:46PM