Today, Velera – the nation’s premier payments CUSO and an integrated financial technology solutions provider – published the June edition of the Velera Payments Index, which includes a deep dive into generational differences in card payment preferences.
While gasoline prices have softened slightly from their 2026 peak in May, they remain stubbornly high as the conflict with Iran entered its fifth month and continued to contribute to rising inflation. As of June 16, the average price for a gallon of gasoline was $4.05 — 29% higher than one year ago and 38% (or $1.12) higher since the war with Iran began on Feb. 23.
For May 2026, the University of Michigan Index of Consumer Sentiment dropped to 44.8, a 10% reduction from April’s 49.8. Inflation is top of mind for consumers, with 57% of respondents citing higher prices cutting into personal finances, up from 50% in April. The erosion in sentiment was more apparent for lower-income consumers and those without college degrees. The 44.8 score is just below the low point in June 2022, when inflation was 9.1%. In preliminary June results, the Index of Consumer Sentiment lightly softened 1.6 points to 48.2. According to the preliminary June survey results, consumer sentiment improved by four points (9%), which is attributed to lower gasoline prices at the start of the month. For May, the Conference Board reported that consumer sentiment in the Consumer Confidence Index softened 0.7 points to 93.1 from an upwardly revised April result of 93.8. Consumers remain concerned over high gasoline prices.=
The Bureau of Labor Statistics (BLS) reported that jobs grew by 172,000 positions in May, more than doubling the WSJ poll of economists' estimate of 80,000 positions. The unemployment rate remained unchanged in May at 4.3%, or 7.3 million people. May’s job growth was noted in leisure and hospitality, local government, health care and social services. Job losses were seen in the financial activities sector in May. While the transportation and warehousing sector remained largely unchanged, the air transportation sector lost 9,000 jobs due to the closure of Spirit Airlines. The May ADP jobs report, which tracks changes in U.S. private employment, reported an increase of 122,000 jobs. Increases were posted in the education and health services, trade, transportation and utilities, construction and professional and business services sectors. Job reductions were noted in the information services and natural resources and mining sectors. The ADP payroll population represents more than 26 million U.S. private-sector employees.
Energy prices — primarily gasoline — continue to take a toll on inflation. For May, the BLS reported a 0.5% increase in inflation, raising the 12-month Consumer Price Index (CPI) to 4.2%. Inflation is at a three-year high, influenced by the war with Iran. The Energy index was the largest contributor to the monthly increase, accounting for 60% of the overall change. Also increasing for the past two months were the shelter and food categories. Core CPI, which excludes food and energy, rose 0.2% in May, finishing the month at 2.9%. Categories contributing to the Core CPI increase included communication, airline fares, medical care, personal care, and recreation. The indexes posting reductions in May’s Core CPI include motor vehicle insurance, household furnishings and operations, and new vehicles.
The last Federal Open Market Committee (FOMC) meeting, which concluded on June 17, was the first under the new Federal Reserve Chair Kevin Warsh, who took over for Jerome Powell following the expiration of his term on May 15. Powell is expected to remain on the Board of Governors, where his term runs through January 2028. Following the June meeting, interest rates remained unchanged at the current federal funds target rate of 3.50% to 3.75% — but the committee signaled a rate increase may be on the horizon.
“Even with ongoing pressure from higher gas prices and inflation, consumers are continuing to spend — but not in the same way across generations,” said Carrie Stapp, Vice President, Marketing, Velera. “Younger consumers, in particular, are showing a stronger pull toward essential categories and digital-first payment experiences, while older segments are maintaining more traditional spending patterns. That divergence is creating new opportunities for credit unions to better align payment strategies, personalize engagement and meet members where they are.”
Key takeaways for May include:
- Transactions and purchases for May remained strong for both debit and credit. Debit purchases increased by 8.5%, with the Money Services, Goods and Gasoline sectors accounting for more than three-quarters of that growth. Credit purchases were up 4.4%, with Gasoline accounting for just over a third of the entire increase. In May, debit transactions were up 5% and credit transactions rose by 3.6%. The Goods sector remained a top source of credit and debit growth, accounting for 40% of the debit transaction growth and 47% of the credit transaction growth.
- The Consumer Price Index (CPI-U) jumped 0.4% in May on rising Energy costs, taking the 12-month inflation rate to 4.2% — marking the highest inflation rate in three years. Gasoline, the primary driver, accounted for 60% of the increase. Also increasing in May were the Housing and Food indexes, while the 12-month Core-CPI rose to 2.9%.
- Generation Z demonstrated less discretionary spending for both credit and debit than older generational segments, with a higher percentage of monthly spending attributed to Gasoline, Transportation and Restaurants.
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.