The Bank of America Institute published a new article today which shows consumer spending continues to demonstrate some signs of resiliency despite a backdrop of rising inflation. Total aggregated Bank of America credit and debit card spending was up 11% year over year in June, compared to 13% and 9% in April and May year over year respectively. Spending growth per household increased 3.3% year over year in the 28 days prior to June 30. Gas prices continue to squeeze consumers but spending on services such as travel and entertainment is still boosted by pent-up demand. The labor market remains supportive of consumers, and their balance sheets are in good shape.
Highlights of the publication:
- Aggregated Bank of America credit and debit card spending was up 11% in June year-over-year; within this, credit card spending rose by 16% year over year, while debit card spending increased by 6% year over year
- Aggregated Bank of America credit and debit card spending growth per household has been slowing, up 3.3% year over year in the 28 days prior to June 30, lagging broader economic indicators such as the Consumer Price Index and Personal Consumption Expenditure. Some of this slowdown may be due to the waning of the boost from pent-up demand for vacations.
- Average gas spending as a share of total card spending per household rose to 9.8% in June for lower-income households (<$ 50k per year), up from 7.7% in February.
- Looking at total card spending excluding gas and grocery, the year over year growth rate for lower-income households contracted 1.0% year over year; for higher-income households, growth excluding gas and grocery remained positive but is on a downward trend.
“Consumers are in better shape to respond to a slowdown in the US economy than they have been in many previous business cycles,” said David Tinsley, senior economist for the Bank of America Institute. “But with some slowdown in services spending, we may need to wait until the summer is over to get a clearer picture of the strength of the underlying consumer momentum.”
Consumer Checkpoint is a regular publication from the Bank of America Institute. It aims to provide a holistic and real-time estimate of US consumers’ spending and their financial well-being, leveraging the depth and breadth of Bank of America proprietary data. Such data is not intended to be reflective or indicative of, and should not be relied upon as, the results of operations, financial conditions, or performance of Bank of America.
The Bank of America Institute is dedicated to uncovering powerful insights that move business and society forward. Established in 2022, the Institute is a think tank that draws on data and analyzes from across the bank and the world to provide timely and original perspectives on the economy, Environmental, Social and Governance (ESG), and global transformation. The Institute leverages the depth and breadth of the bank’s proprietary data, from 67 million consumer and small business clients, 54 million verified digital users, $ 3.8T in total payments in 2021 and $ 1.4T in consumer and wealth management deposits. From this robust data set, the Institute provides a unique perspective on the health of the economy. It also elevates thought leadership from throughout the bank that addresses long-term trends and shares these findings with the general public.
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Melissa Anchan, Bank of America