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Bank of America Institute Launches with Monthly Consumer Checkpoint

Payments and Spending

Bank of America launched the Bank of America Institute 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 proprietary 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

Source: Bank of America

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