Credit card spending explains 92 percent of adjusted consumption growth
Federal Reserve researchers find that credit card spending closely tracks adjusted personal consumption expenditures. Their dataset draws on over 350 million cards and covers more than 3,000 U.S. counties monthly since 2014.
A close but conditional match
Aditya Aladangady, Ricardo Duque Gabriel and Carlo Wix benchmark Y-14M credit card spending against official consumption statistics.
Their baseline measures growth in average purchases among cards with positive spending, using 13 banks present throughout 2014–2026.
Card spending explains 92 percent of variation in national monthly year-over-year adjusted personal consumption expenditures (PCE) growth and 71 percent for retail sales.
Excluding March 2020 through March 2022 reduces these figures to 58 and 59 percent.
Adjusted PCE excludes motor vehicles and parts, housing and utilities, health care, financial services and insurance, other services and nonprofit consumption.
Pooled annual state-level growth regressions explain 87 percent, but within-year relationships are uneven.
Lower incomes, larger spending declines
Local projections trace spending responses to a contractionary monetary policy shock normalized to 25 basis points.
National card spending falls approximately 3 percent by month eight, broadly tracking retail sales.
County estimates show trough declines of about 4.5 percent in low-income counties versus 3 percent in high-income counties.
The differential peaks near 1.5 percentage points around month four and is distinguishable from zero at the 90 percent confidence level.
The authors describe this heterogeneity as suggestive, not precisely estimated.
A complement, not a substitute
The authors position card spending as a complement to official accounts, not a measure of every consumption category.
Changing active-card composition contributes materially to measured growth, and purchase categories are unavailable.
County income also remains a coarse proxy for household liquidity constraints.