Aug 9, 2021 - Economy & Business

Travel spending softens

Illustration: Sarah Grillo/Axios

Credit card transaction data suggest the recent surge in COVID-19 infections is starting to impact parts of the economy.

Why it matters: The economy’s been on a robust upward trajectory, generating almost a million jobs in July alone.

  • The big unknown is how much the spread of the Delta variant could derail that recovery.

What they’re saying: Looking at Chase debit and credit card transaction data, JPMorgan economist Jesse Edgerton observed spending in travel and entertainment softened in early July as infections accelerated.

  • "Most notably, airline spending has fallen almost 20% from a recent peak in mid-July, a larger decline than during the severe winter COVID wave, when spending was at much lower levels," he wrote on Friday.
  • Bank of America saw a similar pattern in its own debit and credit card data.
  • "The slowing in air travel is not just a story for this week: the 2-year growth rate of air travel peaked four weeks ago and has taken a turn lower, potentially reflecting the risks from the Delta variant," the bank wrote on Thursday.

Zoom out: This is just one category of spending. In fact, Bank of America card spending levels for the week ending July 31 were 10% above 2019 levels.

What to watch: The details of the July retail sales report bear watching when they’re released on Aug. 17 for further clues about which categories are getting hit by the rise in infections.

Go deeper