Commerce Signals Card Transactions Data Used in Federal Reserve Bank of New York Analysis.
The following excerpts are from a recent article from the Federal Reserve Bank of New York. Commerce Signals, a Verisk Analytics business, provided the consumer card transactions data used to identify the differences in consumer spending between residents of low-income and higher-income counties, as well as majority-minority (MM) and majority nonminority (MNM) counties. Here’s a link to the full article.
Differences in Consumer Spending by Income
Here we consider two measures of spending: total spending and spending in restaurants and bars, looking first at the difference in total spending by median county income. We find that there is practically no difference in the pre-COVID period in consumer spending growth between low-income counties and other counties. Spending declines drastically across all counties in March 2020. Notably, though, the percentage decline in spending in low-income counties (relative to January 2020) was perceptibly smaller than that for higher-income counties. In other words, households in higher-income counties reduced their total consumption much more than households in low-income counties. The rebound in spending between April and June 2020 is also more rapid in low-income counties, which almost returns to pre-pandemic levels by July 2020. While the gap between both groups of counties began closing towards the last quarter of 2020, it widened around the holidays. As of the end of March 2021, seasonally adjusted consumption in both low-income and higher-income counties surpassed their pre-pandemic levels.
Differences in Consumer Spending by Race
We now turn to differences in aggregate consumer spending by race. As we see in the chart below, there is a gap between MM and MNM counties, with MNM counties experiencing smaller declines than MM counties after the pandemic begins. The gap arises at the beginning of the pandemic, but essentially disappears by the late summer of 2020. This disparity between both groups of counties remains small throughout, and we see the gap closing completely more than once in 2021.