Visa U.S. Spending Momentum Index Shows Omicron’s Impact on Consumer Spending Was Modest 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.
“The SMI readings continue to reflect that there is a clear indication of spending growth moderation in January,” said
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.
Please note, the changes noted above are relative to restated values for December. With this release, the seasonally adjusted SMI series for 2021 has been restated with the latest annual update to the seasonal adjustment factors. The revised series, the unadjusted series and seasonal adjustment factors can be found on our website.
About the Visa SMI
The Visa SMI is an economic indicator of the health of consumer spending. The SMI provides insight into what drives upturns and downturns in spending by measuring the breadth of the momentum supporting these trends. The Visa SMI is based on a sample of aggregated, depersonalized VisaNet data.
The Visa SMI does not take into account the volume of payments; nor does it rely on all
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