The federal government shutdown has been in place since Oct. 1, impacting roughly 750,000 employees who are either furloughed or deemed “essential workers” required to work without pay. Some government reporting on job growth, unemployment, inflation and other various economic indicators that are usually included in Primax special reports has been delayed and/or paused until those employees return to work.
Key Takeaways
Key takeaways from the Primax Payments Pulse: Fall 2025 Spending Report include:
- Growth in debit remained consistent, while growth in credit activity improved in the third quarter. Debit purchases increased by 5.8%, with the Goods, Services and Money Services sectors accounting for 86% of the growth. The only decline was in Gasoline. Credit purchases were up 2.4%, with the Services, Goods and Restaurant sectors accounting for 91% of the entire increase. Similarly, debit transactions were up 3.7% and credit transactions rose by 2.2% in the third quarter as well.
- Impacted by the U.S. government shutdown, the September BLS data for CPI and job growth/unemployment were published later than usual, after the release of this special report. This provided less visibility of key economic indicators for the Federal Reserve in their late October meeting. The last FOMC meeting of 2025 is scheduled to conclude on Dec. 10. The FOMC is funded through interest on government securities and not through the congressional budgetary process; therefore, it is not affected by the current shutdown.
- As an alternative to the BLS jobs report, the September ADP private-sector jobs report showed a reduction in U.S. private employment jobs by 32,000. Earlier this year, the ADP jobs report was one of the first to identify monthly job reductions.
- Travel Purchases for credit and debit were down for the second consecutive year, in stark contrast to the post-COVID boon previously experienced within the sector. Year-to-date credit purchases in the Travel sector were down 3.6% and debit purchases were down 1.1%. The largest contributors to the drop in both credit and debit travel purchases were Airlines and Lodging (Hotel/Motel). Airline credit purchases were down 5.9% and Airline debit purchases were done 4.7% through August. Compared to 2024, Airline debit transactions were down 5% and Airline credit transactions were down 7.3%. Transaction growth for Cruise Lines was down 2.5% for credit and up 2.4% for debit, signaling the impact of higher prices on purchase growth.
Looking Ahead
While the government shutdown made it harder to get a full picture of the economy, financial institutions are doing what they do best: staying flexible and focused. With some uncertainty still ahead, keeping a close eye on consumer behavior will be crucial as we head into the holiday spending season.
We hope that our financial institutions are able to make informed and strategic decisions to best serve their customers by leveraging insights from this and future special reports of the Primax Payments Pulse.
