The Velera Payments Index: September 2025

​Velera – the nation’s premier payments CUSO and an integrated financial technology solutions provider – published the September edition of the Velera Payments Index, which includes a deep dive into the Travel sector, a discretionary spending category that has softened in 2025:
 
In August, consumer spending growth remained consistent while consumer sentiment softened. As a sign of the slowing economy, job growth in August was again much lower than anticipated by many economists, with 22,000 new jobs being reported. Job gains in healthcare were offset by declines in jobs in the federal government, mining, quarrying and oil/gas extraction. On Sept. 9, the U.S. Bureau of Labor Statistics (BLS) released the current employment revision for March 2025, detailing that the economy grew by 911,000 fewer jobs dating back to April 2024. This much weaker view of the labor market brings the average monthly growth in jobs for that period down to 70,000 from the previous 176,000 – showing drops in leisure and hospitality, retailing, professional and business services, and wholesale trade and manufacturing. This downward revision increased pressure on the Federal Reserve for interest rate reductions, resulting in a quarter-point reduction in September and signaling the possibility of further reductions in the two remaining meetings of 2025. The BLS reported that the overall unemployment rate for July marginally increased to 4.3%, or 7.4 million people.
 
Inflation rose in August by 0.4%, per the Labor Department’s Sept. 11 update. The Consumer Price Index (CPI) cumulative 12-month rate of inflation through August is 2.9%, with Shelter having the largest impact on the August results. The Energy index increased by 0.7% for the month, with increases in the Gasoline index. Core CPI, which excludes the Food and Energy sectors, increased by 0.3% in August as it did in July, bringing the 12-month Core CPI to 3.1%. Increases in Core CPI were seen in airline fares, used cars and trucks, apparel and new vehicles. With evidence of rising inflation, the impact of tariffs is slowly materializing in consumer prices. Grocery prices increased 0.6%, the largest monthly jump in the past three years, with heavily imported items showing greater increases. Coffee prices, with half of the U.S. imports coming from Brazil, are up 20% year over year, with Brazilian imports subject to a 50% tariff.
 
The September 2025 University of Michigan Index of Consumer Sentiment decreased by 2.8 points, or 5%, compared to August, finishing at 55.4. The drop is strongest amongst middle- and lower-income consumers. Consistent from August, over half of surveyed consumers provided unaided commentary on tariffs. For the Consumer Confidence Index, consumer sentiment dropped slightly for August, down 1.3 points to 97.4. For the eighth consecutive month, there is a decline in consumers’ assessment of current job availability, contributing to the lower score and offset by stronger expectations for future business conditions.
 
There are two remaining Federal Open Market Committee (FOMC) meetings in 2025, with the next concluding on Oct. 29. Fed Chair Jerome Powell has implied the possibility of additional rate reductions in October and December.
 
“As inflation persists and job growth slows, we’re seeing a clear shift in how consumers prioritize spending – especially in discretionary categories like Travel,” said Norm Patrick, vice president, Advisors Plus Consulting, Velera. “While debit and credit activity showed modest gains overall in August, Travel purchases continued to decline for the second consecutive year, with Airlines and Lodging leading the pullback. These patterns reflect growing caution among consumers navigating higher prices and economic uncertainty. For credit unions, this is a critical moment to stay connected to member needs and deliver value through flexible, responsive financial solutions.”
 
Key takeaways for August include:

• Growth in debit remained consistent and improved in credit activity in August. Debit purchases were up 5.3%, with the Goods, Money Services and Restaurant sectors contributing to more than 80% of the growth. Credit purchases were up 1.9%, with the Goods, Restaurant and Grocery sectors accounting for the entire increase. For August, debit transactions were up 3.6% and credit transactions were up 2.2%.
• The Federal Reserve’s announcement of a quarter-point interest rate reduction has been long-awaited, especially with much weaker job growth updates: August added 22,000 new jobs, while the BLS reduced its current employment revision by 911,000. Fed Chair Jerome Powell signaled two possible further reductions in October and December.
• The 12-month cumulative CPI through August increased to 2.9%, with a 0.4% increase in August. Once again, the Shelter index accounted for most of the monthly increase. Core inflation, which excludes Food and Energy, was up 0.3% to 3.1% for August – the same rate of increase as July.
• Travel Purchases for credit and debit were down for the second consecutive year, in stark contrast to the post-COVID boon previously experienced in this discretionary spending category. Year-to-date credit purchases in the Travel sector were down 4.7% and debit purchases were down 1.5%. The largest contributors to the drop in both credit and debit travel purchases were Airlines and Lodging (Hotel/Motel).

 
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.

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