Visa’s latest SMI reading indicates consumer spending remained solid in June
Visa today released the June reading of the Visa U.S. Spending Momentum Index (SMI), an economic indicator designed to be a timely gauge of the health of consumer spending. The Visa SMI delivers insight into what drives upturns and downturns in spending by measuring the breadth of the momentum supporting these trends.
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In June 2021, the Visa SMI registered 111.7, down 11.6 points from the May reading of 123.3. The reading above 100 suggests consumer spending was expanding year-over-year, but at a slightly slower pace than was seen 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.”
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Spending momentum, although broadening, remains uneven across regions of the country. The SMI for the Midwest region continued to lag behind other parts of the country, with an SMI reading of 109.5 in June. For the second month in a row, the West ranked among the regions with the strongest consumer momentum at 115.9, as the region lagged in its recovery this time last year.
Previously only available to Visa clients, Visa is now publishing components of the SMI on a monthly basis for the general public, in part to help track economic recovery progress. The SMI builds on Visa’s commitment to powering commerce by providing tools and insights that help to gauge consumers’ ability to spend and their overall participation in the economic recovery.