MNI POLICY:Card Spending Resilient After Jobless Payout Lapse

U.S. spending by Chase Bank credit and debit cardholders continued to regain ground lost during the Covid pandemic even after the USD600 state unemployment top-up expired, J.P. Morgan analysts said Wednesday.

Spending fell 9% year-over-year in the week ending August 14, they said, but this is is still the best result since late March. Spending across a panel of 30 million cardholders was down by around 40% in April.

No evidence of greater spending declines was found in states with more unemployment insurance beneficiaries, the report said.

The figures probably aren't a perfect mirror of total consumer spending and cardholders are less likely than the total population to depend on unemployment insurance.

Still, analysts said they have "thus far seen little sign of decline" in other high-frequency indicators, like restaurant reservation and geographic mobility data, suggesting the expiration of the added benefits authorized under the CARES Act may not have hurt U.S. consumers as much as anticipated.

J.P.Morgan's payrolls tracker, combining card spending with other unnamed "alternative" data, sees job gains climbing by 1.2 million in August, though analysts wrote that "Census and education hiring could also affect the final number."