Tracking the Covid-19 crisis with high-resolution transaction data

Financial and payments systems throughout the world generate a vast amount of naturally occurring, and digitally recorded, transaction data, but national statistical agencies mainly rely on surveys of much smaller scale for constructing official economic series. This paper considers 2.1 billion transactions from credit- and debit-card data from BBVA, the second largest bank in Spain, as an alternative source of information for measuring consumption, a key component of GDP. While card spending growth is more volatile than non-durable consumption growth, normalized spending correlates strongly with official consumption measures. In the cross section, patterns in card spending match those in official household budget surveys very closely. The implication is that card spending can stand in for consumption surveys in environments where official data is not available, for example due to reporting delays or to insufficient geographic or household detail. We apply the idea of card spending as a consumption survey to the Covid-19 crisis in Spain, where we present four findings: (1) a strong consumption reaction to lockdown and its easing at the national and regional levels; (2) a rapid, V-shaped consumption recovery in the aggregate; (3) an adjustment to the average consumption basket during lockdown towards the goods basket of low-income households; (4) a divergence in mobility patterns during lockdown according to income in which poorer households travel more during the workweek. Our main conclusion is that transaction data provides high-quality information about household consumption, which makes it a potentially important input into national statistics and research on household consumption.