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PSCU Payments Index March 2022

March 15, 2022 – Today, PSCU – the nation’s premier payments credit union service organization (CUSO) – published the March edition of the PSCU Payments Indexthe goal of which is to provide information and insights to help financial institutions make informed, strategic decisions on the road ahead.

In this month’s iteration, we look at several macroeconomic indicators affecting consumer preferences and behaviors. Following Russia’s invasion of the Ukraine on Feb. 24 and the ensuing refugee crisis, the economic ripple effects are starting to be felt around the world. Russia is the third largest producer of crude oil in the world and, while the United States imports only 5% of its oil from Russia, post-pandemic supply chain concerns have already raised the average price of a gallon of gasoline (now surpassing a national average of $4.30 after reaching $4.00 per gallon for the first time since 2008 earlier this month) with anticipation that prices will further increase. The Consumer Confidence Index fell in February, with results posted on February 22 – just days before the Russian invasion – that reflect concerns around inflation and economic conditions. In addition, the Consumer Price Index (CPI) increased 0.8% in February, to 7.9% – its highest point since January 1982 – according to data released by the Labor Department on March 10. Sectors leading the increases this month include Gasoline and Food. This month, we present a Deep Dive on Gambling and the notable growth in legal sports betting – both following Super Bowl LVI last month and over the past several years.

“Overall consumer spending growth remained strong throughout February, with credit continuing to greatly outpace debit and the Travel and Entertainment sectors experiencing the highest growth once again,” said Karen Postma, vice president of Risk Analytics at PSCU. “In this month’s Deep Dive, we look into the Entertainment sector to explore Gambling transactions – a small but growing area. As more states have begun to legalize online gambling over the past few years, merchants such as FanDuel and DraftKings are driving accelerated growth in this segment through sports betting activity. This growth also presents an opportunity for credit unions to provide their members with education on financial wellness, as legal online sports betting is most appealing to younger demographics.”

A sampling of key takeaways from the March report includes:

  • Consumer spending was very strong for both credit and debit purchases in February, with growth in credit (27%) nearly double the growth in debit (14%). The Travel and Entertainment sectors continue to experience the most growth, while increasing gasoline prices continue to propel the Gas sector. Restaurants continue to deliver impressive results, up 52% for credit purchases and 23% for debit purchases.
  • Online legal gambling has accelerated since 2019 with growth in sports betting. Merchants like FanDuel and DraftKings have drawn in a younger population of consumers as the number of states that permit online gambling grows. Consumer education on financial wellness remains key for activities in this sector.
  • The Consumer Price Index (CPI-U) for February increased to 7.9%, its highest point since January 1982. This represents a 0.8% increase from January. A quarter-point interest rate increase is expected from the Fed following their March meeting.
  • Continued stronger-than-expected job growth was recorded for February, with 678,000 new jobs. The unemployment rate dropped to 3.8%, approaching the pre-pandemic low of 3.5% in January 2020.
  • The credit card delinquency rate increased five basis points to 1.56%. February 2022 results were 38 basis points lower than the pre-pandemic level of February 2019. The continued strong growth in credit purchases over the past three months contributed to the slight rise in delinquencies after 18 months of reductions.

The full report is available for download here or can be shared as a PDF upon request. Additionally, feel free to subscribe here to receive updates when the PSCU Payments Index is published each month.

Peyton Burgess
On behalf of PSCU