Bank of America Institute Launches with Monthly Consumer Checkpoint

Rhea-AI Summary

The Bank of America Institute launched its inaugural Consumer Checkpoint report, revealing an 11% year-over-year increase in consumer spending for March, indicating strong economic momentum. Key findings show robust spending driven by a recovering labor market, though consumers face challenges from inflation, particularly rising energy and food prices. Lower-income households show a 30.4% increase in spending since 2019, despite a squeeze from high gas prices, while upper-income households reported an 11.8% rise. The report emphasizes the resilience of consumer balance sheets amidst economic pressures.

Positive

• 11% year-over-year increase in consumer spending in March.
• Robust consumer spending supported by a healthy labor market and rising wages.
• Rebound in travel and leisure spending, with airline costs up 91% year-over-year.

Negative

• Inflation at 7.9% as of February poses a significant challenge to consumer purchasing power.
• Higher gas prices are impacting consumer spending, with cardholders spending 41% more year-over-year.

Study Finds Consumer Spending in March up 11% Year-Over-Year, Suggesting Solid Economic Momentum

NEW YORK, April 6, 2022 /PRNewswire/ -- Bank of America launched the Bank of America Institute today with the release of its inaugural publication, Consumer Checkpoint, which provides a real-time and holistic view of U.S. consumers' spending and financial health.

Drawing on data and analyses from across the bank and the world, the Bank of America Institute is a new think tank that will provide timely and original perspectives on the economy, Environmental, Social and Governance (ESG) and global transformation.

"Through the Bank of America Institute, we can provide forward-looking thought leadership by leveraging our propriety data and harnessing the power of our extensive expertise," said Brian Moynihan, Chair of the Board and Chief Executive Officer. "Our Consumer Checkpoint is just one example of the insights we will uncover that provide a unique perspective on the health of the economy."

Throughout March, Bank of America credit and debit card spending was up 11% year-over-year, suggesting consumers continue to provide good momentum to the economy. Aggregated payment data also remains robust, pointing to broader growth in bigger-ticket services.

"Consumers are facing headwinds from higher energy and food prices, with gas prices up almost 50% from a year ago" said David Tinsley, senior economist for the Bank of America Institute. "But their balance sheets appear strong enough to weather the storm, provided it doesn't persist too long."

Bank of America spending data (card and payments) suggests that cash spending by U.S. households is exhibiting solid momentum. A number of tailwinds are supporting the consumer, such as the buoyant labor market, with near-record job openings and rising wages. The return to work following the omicron wave has also been a strong positive.

Still, the latest inflation figures, with the annual change in U.S. Consumer Price Index reaching 7.9% in February, represent a major headwind to the consumer. At the very least, high inflation means that every dollar spent by households goes less far in terms of the goods and services they want to buy.

Other key findings include:

• Travel and leisure spending rebounded since the ebbing of the omicron wave; throughout March, airline spending was 91% higher year-over-year while restaurant spending rose by 17%
• Lower-income consumers feel a greater squeeze; card spending by households making less than $50k/year was up 4% relative to the same period in 2021 and up 30.4% from 2019, whereas spending by upper-income households (>$125k/year) rose 11.8% year-over-year and 22.5% from the pre-pandemic level three years ago
• Higher gas prices are having a noticeable impact, with cardholders spending 41% more than the same period last year
• Pandemic savings are still providing cash buffers, as evidenced by lower-income consumers having elevated cash savings in deposit accounts relative to pre-pandemic levels

For the complete Consumer Checkpoint including methodology, please visit our website.

Bank of America

Bank of America is one of the world's leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 67 million consumer and small business clients with approximately 4,200 retail financial centers, approximately 16,000 ATMs, and award-winning digital banking with more than 54 million verified digital users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and approximately 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.

For more Bank of America news, including dividend announcements and other important information, register for email news alerts.

Reporters may contact:
Melissa Anchan, Bank of America     
Phone: 1.646.532.9241 
melissa.anchan@bofa.com

 

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SOURCE Bank of America Corporation

FAQ

What does Bank of America's Consumer Checkpoint report indicate for BAC stock?

The Consumer Checkpoint report shows an 11% increase in consumer spending, suggesting positive consumer behavior, which may support BAC stock performance.

How is inflation affecting consumer spending according to Bank of America?

The report indicates inflation at 7.9% significantly impacts purchasing power, making consumer dollars less effective.

What were the spending trends reported by Bank of America in April 2022?

Bank of America noted a rebound in travel and leisure spending and significant increases in household consumption, despite inflationary pressures.