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Bank of America's data shows continued spending momentum among consumers

Published 05/10/2024, 12:34 AM
© Reuters.

According to Bank of America's latest analysis, consumer spending maintained its momentum in April despite various seasonal factors impacting recent data trends.

Bank of America's aggregated credit and debit card spending per household rose by 1.0% year-over-year (YoY) in April, building on a 0.3% YoY increase observed in March. While recent data has been influenced by the early Easter and other seasonal fluctuations, the underlying spending momentum remains "relatively soft but stable."

Lower-income households have notably driven spending growth, outpacing higher-income counterparts in Bank of America's data. This trend aligns with an apparent rise in after-tax wages and salary growth for lower-income groups, coupled with sustained savings buffers.

However, analysts caution that the cooling labor market warrants close monitoring. Despite tax refunds skewing towards lower-income cohorts, increased debt payments may have tempered the boost to spending typically associated with tax refunds.

Rising property insurance costs pose a significant headwind for consumers, adding to economic challenges. While some factors contributing to higher insurance payments may persist, consumers continue to navigate spending decisions amidst evolving financial dynamics.

Overall, Bank of America's data underscores continued resilience in consumer spending.

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