Key Takeaways:

Growth in debit remained consistent and improved in credit activity in August. Debit purchases were up 5.3%, with the Goods, Money Services and Restaurant sectors contributing to more than 80% of the growth. Credit purchases were up 1.9%, with the Goods, Restaurant and Grocery sectors accounting for the entire increase. For August, debit transactions were up 3.6% and credit transactions were up 2.2%.
The Federal Reserve’s announcement of a quarter-point interest rate reduction has been long-awaited, especially with much weaker job growth updates: August added 22,000 new jobs, while the BLS reduced its current employment revision by 911,000.
The 12-month cumulative CPI through August increased to 2.9%, with a 0.4% increase in August. Once again, the Shelter index accounted for most of the monthly increase. Core inflation, which excludes Food and Energy, was up 0.3% to 3.1% for August – the same rate of increase as July.
Travel Purchases for credit and debit were down for the second consecutive year. Year-to-date credit purchases in the Travel sector were down 4.7% and debit purchases were down 1.5%. The largest contributors to the drop in both credit and debit travel purchases were Airlines and Lodging (Hotel/Motel).

What Credit Unions Should Do Now:

With higher average transaction amounts and positive interchange rates, the slowdown in Travel spending could pressure interchange income. Counter this by driving new account growth and focusing promotional campaigns on resilient, high-interchange categories.
Deliver fast, secure, mobile-first lending that generates new accounts and fuels profitability. With instant applications, real-time approvals and immediate digital card access, spend can be captured from day one.
Implement a Convenience Check Balance Transfer campaign to strengthen retention, build loyalty, grow balances and create income opportunities. A competitive low-rate offer delivers meaningful savings for members while supporting revenue growth.