Visa’s May SMI reading indicates a healthy U.S. consumer
SAN FRANCISCO–(BUSINESS WIRE)–
Visa (NYSE: V) today released the May 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.
In May 2021, the Visa SMI remained historically elevated at 123.3, indicating that the U.S. consumer recovery remains on firm ground. Exceptionally low SMI readings this time last year are creating some distortions in the true signal of consumer spending. At its current level, the Visa SMI implies that 59 percent of consumers are now spending more than they did a year ago, while only 41 percent are spending the same or less. Compared to May 2019, which was not affected by the pandemic and lockdowns, 52 percent of consumers are spending more, which is up slightly from the 51 percent of consumers who were spending more in April. The implication is that while the SMI decelerated on a month-over-month basis, the breadth of consumer spending actually expanded in May once adjusting the figures for last year’s low readings.
“May marks the one-year anniversary of the beginning of the consumer momentum recovery,” said Wayne Best, Visa’s Chief Economist. “The SMI’s strong reading again in May reflects the solid ongoing recovery taking place in the consumer sector.”
The gains in spending momentum,