What: US consumer spending momentum rose for a second consecutive month in September, with Visa's index up 1.2 points to 101.8, led by a 5.6-point jump in gasoline spending.

Why it is important: The gain is led by gasoline rather than core retail: discretionary momentum, at 99.0, remains below expansion territory, so the headline index overstates demand for department-store categories.

Visa's U.S. Spending Momentum Index rose 1.2 points to 101.8 in September, the second consecutive monthly gain, as gasoline spending momentum jumped 5.6 points. Average retail gasoline prices increased 7.3% month on month and 37.6% year on year, reaching their highest level since May. The report ties the surge to a 40% decline in oil barrels passing through the Strait of Hormuz, the shutdown of Saudi Arabia's East-West pipeline after attacks and renewed U.S. strikes on Iranian tankers.

Discretionary momentum rose 0.4 points to 99.0 and non-discretionary momentum 0.7 points to 99.7, both still below the 100 expansion threshold. Restaurant momentum also improved. The report attributes the resilience to 3.1% year-on-year wage growth, a 0.6% rise in hours worked and upward revisions to real income in the first half.

All four regions ended September in expansion territory. The Midwest (+2.5 points, to 102.6) and Northeast (+1.6) led, while the West and South each gained 0.6. Weather distorted local patterns: a late-month Northeast storm drove a nearly 4.2-point drop in non-seasonally adjusted restaurant momentum, while likely storm preparation in the Midwest lifted non-seasonally adjusted non-discretionary momentum by 3.5 points.

IADS Notes: The second consecutive monthly gain follows the July contraction recorded by Visa, August 2026, when total momentum fell 2.7 points to 98.6 and discretionary spending dropped 3.6 points to 95.7, its lowest level since February 2025, as higher gasoline and energy costs squeezed household budgets. Discretionary momentum has since recovered to 99.0 but remains below the expansion threshold. Retail sales data point in the same direction: Reuters, September 2026 reported that August sales rose 1.2% and core sales 1.4%, with gains across nonstore, electronics, sporting goods and clothing, even as import prices rose 7.0% year on year. The gasoline effect cuts both ways. Bloomberg, July 2026 showed that a 5.3% drop in gasoline-station receipts held down June headline sales while sales excluding gasoline rose 0.7%, and warned that renewed US-Iran tensions could reverse that relief, a risk the 7.3% monthly rise in pump prices in the new Visa data now illustrates. Department stores remain exposed to a selective consumer: Reuters, August 2026 reported Kohl's second-quarter revenue down 0.9% as middle- and lower-income households limited apparel and home purchases. On the supply side, Inside Retail, June 2026 covered the reopening of the Strait of Hormuz as a source of potential logistics cost relief, a prospect that contrasts with the 40% decline in oil barrels transiting the strait cited in the new report.

US spending momentum rises for second month, led by gasoline