Visa U.S. Spending Momentum Index Shows Omicron’s Impact on Consumer Spending Was Modest in January
Visa (NYSE: V) today announced that the U.S. Spending Momentum Index (SMI) was 102.4 in January (seasonally adjusted), down from a revised 109.4 in December. The Visa SMI is an economic indicator of the health of consumer spending. When the Visa SMI rises above 100, the consumer spending momentum is strengthening and when it falls below 100, the spending momentum is weakening as fewer consumers are spending more relative to the previous year.
Read More: Actify Appoints Bob Anson As Vice President Of Products
“The SMI readings continue to reflect that there is a clear indication of spending growth moderation in January”
The SMI’s decline from December was due in large part to the rise in new COVID-19 cases with the spread of the Omicron variant. This current wave’s impact on spending was less than prior outbreaks, and for the most part has not derailed the recovery as more households continue to spend more than they did last year. Recent research from Visa Business and Economic Insights has further found that while consumer demand is less impacted by each successive wave, business disruptions have increased, contributing in part to rising inflation.
Read More: SalesTechStar Interview with Brad Copeland, Vice President of Sales at Productsup
“The SMI readings continue to reflect that there is a clear indication of spending growth moderation in January,” said Wayne Best, Visa’s Chief Economist. “That said, we expect more robust spending in the months ahead as virus concerns slowly subside.”
By category, the SMI for discretionary purchases fell 3.9 points from the previous month to 100.6. The SMI for non-discretionary purchases fell 2.4 points to 97.4. On a regional basis, the SMI fell for all four regions of the country relative to last month but continued to signal positive spending momentum on a YoY basis. SMI readings in the South (101.5) and Midwest (101.8) were among the softest followed by the Northeast (102.0). The downshift in spending momentum in these three regions suggests that severe winter weather may have played a role in holding back consumer momentum for the month. The West continued to have the strongest SMI reading among the regions at 106.1.
