When gas prices jump 44% in a year, you’d think people would hunker down and close their wallets. Turns out, that’s not what happened in April. According to the latest Velera Payments Index for May 2026, consumers kept spending at a healthy clip despite watching their fuel costs climb to an eye-watering $4.50 per gallon.
Velera – a leading credit union service organization specializing in payments and financial technology – just released their monthly deep dive into payment trends, and this edition takes a particularly close look at how digital payments are reshaping the landscape.
The Big Picture: Spending Stayed Strong
Here’s what makes April interesting: even as gas prices soared 53% (that’s $1.56 more per gallon) since the conflict with Iran started in late February, both debit and credit card activity posted solid gains. Consumer spending behavior essentially shrugged at the pump shock and carried on.
Now, consumer sentiment? That’s a different story. People definitely felt the squeeze. The University of Michigan’s Index of Consumer Sentiment dropped 6.6% in April, falling from 53.3 to 49.8. The decline hit across every demographic slice you can imagine – age, income, education level, political affiliation. By early May, it had softened further to 48.2. Meanwhile, the Conference Board’s Consumer Confidence Index barely budged, edging up just 0.6 points to 92.8.
Translation: people are worried, but they’re still spending. It’s a classic case of actions speaking louder than words.
The Employment Situation
April’s job market threw economists a curveball. The Bureau of Labor Statistics reported 115,000 new positions – more than double what the Wall Street Journal’s economist poll predicted (they’d guessed around 55,000). The unemployment rate held steady at 4.3%, representing about 7.2 million people.
Where did those jobs show up? Healthcare, transportation, warehousing, and retail trade all saw gains. Federal government positions continued their downward trend. The private sector told a similar story, with ADP reporting 109,000 new jobs concentrated in education, health services, trade, transportation, utilities, construction, and financial activities. Interestingly, the growth landed primarily in the smallest companies (1-49 employees) and the largest ones (500+ employees), with the middle getting squeezed a bit.
Inflation: The Gasoline Story Continues
April’s inflation number came in hot – up 0.6% for the month, pushing the 12-month Consumer Price Index to 3.8%. That’s the biggest jump we’ve seen in two years. The culprit? You guessed it: energy costs, specifically gasoline, which surged 3.8% and accounted for a whopping 40% of the overall increase.
Shelter and food costs also climbed. Core CPI – which strips out food and energy to show underlying inflation trends – rose 0.4% in April, landing at 2.8% for the year. Contributors to that core number included household furnishings, airline fares, personal care products, clothing, and education. On the bright side, new vehicles, communication services, and medical care all saw price decreases.
Federal Reserve Leadership Change
In regulatory news, there’s a new sheriff in town at the Federal Reserve. Jerome Powell’s term as Chair ended on May 15, though he’ll stick around on the Board of Governors through January 2028. His successor, Kevin Warsh, squeaked through Senate confirmation with a 54-45 vote on May 13 – the narrowest approval margin since the Senate confirmation process was established in 1977.
The Fed kept interest rates unchanged at its April 29 meeting, Powell’s last as Chair. The next Federal Open Market Committee meeting wraps up on June 17, which will be Warsh’s first opportunity to steer monetary policy.
What The Payment Data Actually Shows
Here’s where things get interesting for anyone watching consumer behavior and payment trends. Despite the economic headwinds, card activity stayed remarkably robust:
- Debit purchases jumped 8.5% – with Money Services, general goods, and (unsurprisingly) gasoline accounting for three-quarters of that growth
- Credit purchases climbed 3.1% – and gasoline alone represented 35% of that entire increase
- Transaction volumes rose across the board – debit transactions up 5%, credit transactions up 2.6%
“April’s data reinforces a familiar but important theme: even as higher gas prices and renewed inflation pressures weigh on sentiment, consumer spending behavior has remained steady,” said Cody Banks, SVP of Product Experience & Enablement at Velera. “Debit and credit activity continued to grow, with an increasing share of that activity shifting toward digital and tokenized payment experiences.”
Banks noted that while tax refunds provided some short-term support, the real story is how adaptable consumers have proven to be – and how much of that spending now flows through digital channels.
Digital Wallets Are Winning
Perhaps the most significant trend buried in April’s numbers: digital wallets are eating more of the payment pie. Year-to-date through April, digital wallets represented 12% of all debit transactions, up from 9% a year earlier. On the credit side, they accounted for 7% of transactions, compared to 6% the previous year.
Those might seem like modest percentages, but the trajectory tells the story. Digital payment adoption is accelerating, and consumers increasingly expect the convenience and security that tokenized payments provide.
What This Means For Credit Unions
For financial institutions, especially credit unions, the message is clear: digital capabilities aren’t optional anymore. They’re table stakes. As Banks put it, credit unions need to “closely monitor where spend is evolving and ensure digital capabilities keep pace with changing consumer expectations.”
Consumer behavior is shifting whether the economy booms or faces headwinds. The institutions that recognize this shift and invest accordingly will be the ones that maintain relevance and deepen member relationships. Those that don’t risk watching transaction volume – and the valuable data and relationships that come with it – flow elsewhere.
Oh, and one more thing: President Trump signed funding for Homeland Security on April 30, which includes TSA but leaves out Immigration and Customs Enforcement and parts of Customs and Border Protection. The TSA funding timing is fortunate, arriving just as Memorial Day kicks off the summer travel season. Because nothing says “relaxing vacation” quite like fully-staffed airport security lines.