Tim Hoyle, CFA, Co-Chief Investment Officer
What’s in Your Wallet?
You and 243 million other Americans probably have a Mastercard (MA) branded credit card in your wallet. As the U.S. economy begins to reopen, we believe credit card volumes will provide some of the best real-time data for consumer confidence. Mastercard U.S. transaction volumes have grown at a rate of about 10% during the past two years. Growth rates declined in the first quarter as economic activity ground to a halt in late March and bottomed during the second week of April. Spending is still down on a year-over-year basis, but the trend has improved significantly. We estimate that 95% of Americans will be free of COVID restrictions by early June, and we will continue to watch retail spending as a sign for a recovering economy. So far, the trends appear positive. We will keep you informed as more data points become available.