Trends in consumer purchasing are beginning to show early signs that we are on a path of the soft landing the Fed has been working toward. In our February 2023 data, we find consumer purchasing, while still positive for credit and debit cards, in mid-single-digit growth.

In the March 2023 edition of the PSCU Payments Index, February’s growth rates for transactions and purchases continue to converge for both credit and debit in the mid-single digit range. In this month’s Deep Dive, we look at two sectors with the highest year-over-year growth in purchases: Travel (discretionary spending) and Transportation (non-discretionary spending).

Key takeaways include:

Transaction growth in both discretionary and non-discretionary spending categories moderated in February. Growth in transactions for essential goods and services grew by 5% for credit and 4% for debit. In the discretionary category, credit transactions grew by 6% and debit transactions grew by 10%.
Growth in the discretionary spending Travel sector remains strong, with credit purchases up 18% and debit purchases up 16%. The strength within this sector comes from both cruise lines and airlines, with strong growth with non-U.S. based airlines. Cruise line purchases grew 118% for credit and 155% for debit year over year. For non-U.S. based airlines, credit purchases were up 48% and debit purchases were up 32%.
Transportation, which represents a small portion of overall activity, yields insight into the return to physical work locations. For February, credit transactions and purchases were up 21%. Debit transactions were up 16% and purchases up 15%. Within this sector, top growth categories include mass transit (subways, bus and rail), with credit purchases growing 31% and debit purchases growing 28%.

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