The Velera Payments Index: August 2025

Velera – the nation’s premier payments CUSO and an integrated financial technology solutions provider – published the August edition of the Velera Payments Index, which includes a deep dive into economic uncertainty:

Instead of “saving for a rainy day,” it appears that consumers are actually spending in advance of potential rainy days. In July, growth in consumer spending continued to rise, led by the Goods sector, with overall debit activity posting the second-highest month of growth in purchases for 2025, behind January. Buoyed by early back-to-school spending, Amazon Prime Day and the competing Walmart and Target sale events, the Goods sector accounted for over a third of the growth in debit purchases and over half of the growth in credit purchases – just as many of the revised tariffs on imported goods began to take effect on August 7. In the August 2025 edition of the Velera Payments Index, we explore evidence of shifting consumer behaviors during economically uncertain times.

Consumer sentiment slightly improved in July, with the Consumer Confidence Index increasing by 2.0 points to 97.2. This number reflects an upward revision of the June survey by 2.2 points. The modest improvement came from participants over the age of 35 and across all income levels (with the exception of the lowest – below $15k annually). The July 2025 University of Michigan Index of Consumer Sentiment increased by one point compared to June, finishing at 61.7. Trends indicate sentiment is moving in a favorable direction, although it still remains broadly negative. Year over year, the index is down 4.7 points. While consumers remain cautious about the direction of the economy, their worries have eased slightly since April 2025.

In the Labor Department’s Aug. 12 update, the Consumer Price Index (CPI) increased 0.2% in July, keeping the cumulative 12-month rate of inflation at 2.7%. Shelter was the primary factor for the monthly increase. Core CPI, which excludes the Food and Energy sectors, increased by 0.3% in July following a 0.2% increase in June, bringing the 12-month Core CPI to 3.1%. Increases in Core CPI were seen in medical care, airline fares, recreation, household furnishings and operations, and used cars and trucks.

In July, job growth was much lower than anticipated by many economists, with 73,000 new jobs being reported. Additional positions were reported in the healthcare and social assistance sectors, with continued declines in jobs with the federal government. The July report included a downward revision of 258,000 jobs for the combined period of May and June 2025. The number of Americans unemployed for at least 27 weeks increased by 179,000 to 1.8 million in July. The U.S. Bureau of Labor Statistics (BLS) reported that the overall unemployment rate for July remained unchanged at 4.2%, or 7.0 million people. Following the publication of the July report, BLS Commissioner Erika McEntarfer, a non-partisan government employee, was removed from her position by President Trump. E.J. Antoni, a Heritage Foundation economist, has been nominated as the next commissioner. 
 
With many of the adjusted tariffs taking effect on Aug. 7, consumers are expected to feel the impact on the cost of goods in the coming weeks and months. While many retailers have been able to maintain current prices and absorb the costs of the import taxes on goods made abroad, these taxes may be passed on to consumers as tariffs rise. While most countries are subject to a 15% tariff, specifics with many of our largest trading partners are still being worked out. 
 
The next Federal Open Market Committee (FOMC) meeting will conclude Sept. 17, when it is widely anticipated by most economists that there will be a quarter-point rate decrease, based on the economic data available in mid-August and the downward revisions to jobs for recent periods.

“The ripple effects of tariff policy and inflationary pressure are beginning to show in consumer behavior. We’re seeing a shift towards essential purchases, cautious discretionary spending and early stockpiling — especially among younger consumers,” said Brian Caldarelli, executive vice president and chief administrative officer, Velera. “These patterns reflect a growing sensitivity to economic signals and a desire to get ahead of potential cost increases. For credit unions, staying attuned to these shifts is critical to supporting members through uncertainty and maintaining relevance in a rapidly changing environment.”

Key takeaways for August include:

• Growth picked up for debit and remained slow for credit in July. Debit purchases were up 6.2%, with the Goods and Money sectors contributing more than two-thirds of growth. Credit purchases were up 1.6%, with the Goods and Services sectors accounting for the entire increase. Insurance premiums continued to drive growth in the Services sector. For July, debit transactions were up 4.1% and credit transactions were up 1.6%.
• The 12-month cumulative CPI through July remained the same at 2.7%, with a 0.2% increase in July. The Shelter index accounted for most of the increase in July. Core inflation, which excludes Food and Energy, was up 0.3% at 3.1% for July. The Core CPI results showed more inflationary pressures, including goods stemming from tariffs.
• There are signs of shifting consumer spending, influenced by the economic uncertainty in the market. Debit activity continued to drive consumer spending across the Goods sector for most merchants, with large retailers, wholesale clubs and automotive sales showing the most notable growth. While a smaller percentage of activity, discretionary spending was most impacted in the Travel and Entertainment categories.

​The full report is available for download here or can be shared as a PDF upon request. Please let us know of any questions or additional needs, or if you’d like to coordinate an interview.

---