ST. PETERSBURG, Fla.– Instead of “saving for a rainy day,” it appears that consumers are actually spending in advance of potential rainy days, according to a new analysis of card spending data released by Velera.
The new Payments Index data from Velera, which includes a “deep dive into economic uncertainty,” reveals that during July growth in consumer spending continued to rise, led by the Goods sector, with overall debit activity posting the second-highest month of growth in purchases for 2025, behind January.
“Buoyed by early back-to-school spending, Amazon Prime Day and the competing Walmart and Target sale events, the Goods sector accounted for over a third of the growth in debit purchases and over half of the growth in credit purchases – just as many of the revised tariffs on imported goods began to take effect on August 7,” Velera said.
Increased Confidence
As the CU Daily reported earlier, consumer sentiment slightly improved in July, with the Consumer Confidence Index increasing by 2.0 points to 97.2. The “modest improvement came from participants over the age of 35 and across all income levels (with the exception of the lowest – below $15k annually),” the company said.
The Velera report also notes that the Labor Department’s Aug. 12 update reveals theConsumer Price Index (CPI) increased 0.2% in July, keeping the cumulative 12-month rate of inflation at 2.7%. Shelter was the primary factor for the monthly increase.
“With many of the adjusted tariffs taking effect on Aug. 7, consumers are expected to feel the impact on the cost of goods in the coming weeks and months. While many retailers have been able to maintain current prices and absorb the costs of the import taxes on goods made abroad, these taxes may be passed on to consumers as tariffs rise,” Velera stated.
‘Ripple Effects’
“The ripple effects of tariff policy and inflationary pressure are beginning to show in consumer behavior. We’re seeing a shift towards essential purchases, cautious discretionary spending and early stockpiling — especially among younger consumers,” = Brian Caldarelli, executive vice president and chief administrative officer, said in a statement. “These patterns reflect a growing sensitivity to economic signals and a desire to get ahead of potential cost increases. For credit unions, staying attuned to these shifts is critical to supporting members through uncertainty and maintaining relevance in a rapidly changing environment.”
Key Takeaways
According to Velera, key takeaways for August include:
- Growth picked up for debit and remained slow for credit in July. Debit purchases were up 6.2%, with the Goods and Money sectors contributing more than two-thirds of growth. Credit purchases were up 1.6%, with the Goods and Services sectors accounting for the entire increase. Insurance premiums continued to drive growth in the Services sector.
- For July, debit transactions were up 4.1% and credit transactions were up 1.6%.
- There are signs of shifting consumer spending, influenced by the economic uncertainty in the market. Debit activity continued to drive consumer spending across the Goods sector for most merchants, with large retailers, wholesale clubs and automotive sales showing the most notable growth, Velera said. While a smaller percentage of activity, discretionary spending was most impacted in the Travel and Entertainment categories.
The full report is available for download here.
