Bank of America CEO: Consumers Show Spending ‘Resilience’

Bank of America’s CEO says consumer spending is still healthy despite steep interest rates.

Spending has risen between 3% and 4% this month compared to a year ago, Brian Moynihan said in an interview with Bloomberg News Monday (May 13).

He added that uptick is indicative of a slower-growth, lower-inflation landscape, but still a bright spot for the American economy, as people keep spending more.

“It shows you the resilience of the American consumer,” Moynihan said during a summit on French business in Versailles. “There’s a thousand things that could go wrong tomorrow, but right now everything is in pretty good shape.”

His comments came the same day that the Federal Reserve Bank of New York’s Center for Microeconomic Data released its April Survey of Consumer Expectations, which showed that Americans expect to see spending growth of 5.2% in the year ahead, accelerating slightly from 5% in March.

“But there are some mixed signals here,” PYMNTS wrote. “The data showed that the consumers who say they will be ‘much better off’ financially one year from now dipped from 5.4% in March to 4.4% in April, the folks who think that things will be “about the same” was about a percentage point higher.”

However, the share of consumers who believe they will be “much worse off” climbed to 5.5% from 2.8% in March.

PYMNTS Intelligence’s own research into inflation expectations at the start of the year noted that a substantial number of consumers were adjusting their spending, with more than 56% of them expecting higher retail prices through 2024.

In terms of actual spending, as noted in a separate piece here Monday, PYMNTS Intelligence found that of more than 1,700 consumers who bought non-retail items in the last 12 months, the average purchase as of the latest quarter was $85.40, compared from $88 in the middle of the pandemic in late 2021. The numbers are more or less the same for groceries, at about $93 in the latest reading, and just about $92 during the pandemic.

This week will see new inflation data from the government, but as PYMNTS’ Karen Webster wrote last year, those numbers matter less to consumers than the ones right in front of them.

“The average American’s view of inflation and the inflation rate is shaped by their costs — what’s left in their checking account after they buy the basics, pay the mortgage or the rent and their monthly bills — not the government’s monthly inflation report card for what’s true on average,” she argued.