Visa’s U.S. Spending Momentum Index (SMI) for December stands at 108.4, making it the strongest reading for that month since the start of the index, the company announced Thursday (Jan. 13).
The SMI also set a record for the highest fourth quarter in history when it hit 110.3 for the last three months of 2021.
When the Visa SMI tops 100, it means consumer spending momentum is strengthening. When it falls below 100, the spending momentum is weakening, as consumers are spending less when compared to the previous year.
Looking deeper into the December numbers, the SMI for discretionary purchases dropped 4.9 points from the previous month to 103, while it moved up 0.1 points for non-discretionary purchases to 99.9.
The Midwest and southern regions of the U.S. saw the biggest drop in the month with 4 points each, while Northeast reading fell 2.5 points and the West slid 1.8 points. The western region recorded the strongest performance in December with an SMI reading of 110.1.
Mastercard’s most recent SpendingPulse data said there was 8.5% growth in retail sales from Nov. 1 to Dec. 24, excluding vehicle sales. That jump in spending was led by a strong holiday shopping season.
Related: Mastercard: Online Sales Grew 11%, US Retail Up 8.5% This Holiday Season
Online sales were up 11% compared to last year for the same period, according to the Mastercard SpendingPulse’s most recent data, which shows that customers shopped early and were rewarded with more special deals from retailers.
Thanksgiving weekend became crucial for holiday shoppers in 2021, as it had been before — Black Friday showed a top spending day from Nov. 26 through Nov. 28, with retail sales up 14.1%.
Consumers also bought more items in smaller boxes this year than they had in the past, the report noted. As expected, eCommerce sales were the standout of the holiday shopping season, making up 20.9% of total retail sales, a boost from 20.6% in 2020.
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