July 17, 2026

Consumer Spending Stays Strong While Gas Prices and Confidence Play Tug-of-War: July 2026 Payment Trends

Velera just dropped its July 2026 Payments Index, and if you’re wondering whether consumers are still opening their wallets despite everything going on in the world—spoiler alert: they absolutely are.

In fact, we’re seeing the biggest monthly purchasing surge in four years, even as gas prices hover stubbornly high and geopolitical tensions make headlines.

Let’s talk about what’s happening at the pump first. As of mid-July, you’re paying an average of $3.86 per gallon of gas—that’s 23% more than last year and a solid 31% jump (about 92 cents) since tensions with Iran kicked off back in February. The good news? Prices have dropped from their April peak of $4.50. The not-so-good news? They ticked up another 8 cents last week as the Strait of Hormuz situation remains complicated. President Trump called off the ceasefire in mid-July, so we’re watching this closely.

How Are Consumers Actually Feeling?

Here’s where it gets interesting. The University of Michigan’s Consumer Sentiment Index jumped to 49.5 in June—a solid 10% increase from May’s gloomy 44.8. That improvement showed up across the board: different income levels, wealth brackets, and even political affiliations all got a bit more optimistic. Meanwhile, the Conference Board’s Consumer Confidence Index inched up just 0.6 points to 91.2. The slight uptick? People are hoping those falling oil prices mean inflation might finally ease up.

But let’s be real—over half of surveyed consumers still cite inflation and high prices as their top budget concern. The sentiment may be improving, but wallets are definitely feeling the squeeze.

The Job Market: Slower Than Expected

June’s employment numbers came in at 57,000 new jobs according to the Bureau of Labor Statistics—roughly half what economists were predicting (115,000). The unemployment rate did drop slightly to 4.2%, representing about 7.1 million people looking for work.

The wins came from professional and business services, social assistance, and healthcare. The losses? Leisure and hospitality took a hit. The ADP report, which tracks private-sector employment across 26 million workers, showed 98,000 new jobs with gains in education, health services, trade, transportation, utilities, and financial sectors. Natural resources and mining weren’t so lucky.

Inflation: Finally Some Good News

June delivered the best inflation news we’ve seen in a while. The Consumer Price Index dropped 0.4%—the biggest single-month decline since April 2020—bringing the 12-month rate down to 3.5%. Energy prices fell 5.7%, which more than made up for increases in shelter and food costs.

Core CPI (that’s inflation without the volatile food and energy categories) stayed flat at 2.9% for the month. The decreases included motor vehicle insurance, communication, apparel, medical care, and used cars. Recreation, household furnishings, and personal care saw price bumps.

The Spending Paradox Continues

Here’s the head-scratcher that keeps showing up in the data: consumers say they feel stressed about money, but they’re spending like there’s no tomorrow. Year-over-year growth in June hit its strongest level of 2026, driven largely by activity in the goods sector.

What’s fueling this? Think Amazon Prime Day and competing big-box retailer sales in late June, plus all the economic activity around World Cup events happening in North America (including a surprising surge in prediction market betting). But here’s the catch—despite this spending strength, more consumers are falling into the “financially unhealthy” category. The big question: will we see a post-World Cup spending hangover this fall?

“Consumer spending remains resilient and is expected to stay strong, yet inflation-adjusted growth has been modest,” said Ryan Myers, SVP of Advisors Plus at Velera. “This mix of spending is shifting toward essential expenses such as gas, energy, housing, goods and healthcare while reducing discretionary spending on categories like travel. Consumers expect inflation to remain elevated, which drives them to make purchases ahead of anticipated increases and actively seek value and discounts. Amazon Prime Day was a great demonstration: U.S. online sales reached a record $26.4 billion, up 9.3% year over year, yet average household spending fell 9%, and most purchases were apparel and household essentials.”

Translation? People are spending more overall, but they’re being strategic about it—focusing on necessities and hunting for deals rather than splurging on vacations.

What About Interest Rates?

The Federal Open Market Committee meets July 17, and rates have been sitting steady in the 3.5% to 3.75% range. Fed members are split on which direction to move next, but they unanimously voted to keep things unchanged after their June meeting. Stay tuned.

The Key Numbers You Need to Know

Card activity is booming: June delivered the strongest year-over-year growth in both transactions and purchases since 2022. Debit purchases jumped 8.8%, with Money Services and Goods sectors driving over 60% of that growth. Credit purchases climbed 7%, with Goods accounting for more than 40% of the increase. Both debit and credit transactions rose 5.4%.
Inflation dropped more than expected: The Consumer Price Index fell 0.4% in June—the biggest monthly decrease since April 2020—bringing the 12-month rate to 3.5%. Lower gas prices did the heavy lifting, offsetting increases in shelter and food. Core CPI held steady at 2.6%.
Gas prices remain elevated: Even though we’re off the May peak of $4.50 per gallon, prices are still 21% (or 65 cents) higher than a year ago. Renewed tensions with Iran could push crude oil prices up again soon. Gas purchases on both credit and debit cards each represented 15% of overall spending increases.
Prediction markets are having a moment: Forget niche—prediction markets are going mainstream. Driven by World Cup contracts, these platforms saw their highest monthly volumes ever in June. Turns out global sports events can generate as much (or more) trading action than political events. Kalshi is winning in the U.S. thanks to its regulated structure, while Polymarket leads globally with deeper liquidity and more market options.

The bottom line? Consumer spending is holding strong even as economic signals send mixed messages. People are spending strategically, hunting for value, and increasingly engaging with new financial products. Whether this momentum continues post-World Cup remains the million-dollar question for the fall.