The Bank of America Institute published a new article today which provides evidence that consumers’ finances, particularly of those in lower-income groups, are holding up, contrary to findings of sentiment surveys about the impact of higher prices.
Citing strong growth in credit and debit card spending – up 11% year over year in March, and continued strength into April – as well as a booming labor market and elevated cash levels in checking and savings accounts, the data shows that lower-income consumers are not reacting to this inflationary environment as adversely as one might gather from reports.
Highlights of the publication:
- Aggregate Bank of America credit and debit card spending was up 15% in the first eight days of April compared to the same period in 2021.
- Among cardholders with less than $50,000 in annual income, card spending per household is up 33.3% in early April compared to the same time period in 2019.
- Bank of America ACH, Wire and P2P payments were up 26% in the first eight days of April year over year.
- Checking and savings balances of households with less than $50,000 annual income have at least $1,500 more than they started in 2019
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“While sentiment surveys show that consumers are inclined to cut back in response to higher prices, people don’t always do what they say they are doing,” said David Tinsley, senior economist for the Bank of America Institute. “Leveraging the breadth and depth of our comprehensive payments and spending data from 67 million consumer and small business clients, we are able to get a richer and deeper assessment of the consumer than small-scale surveys can ever achieve. Our data does not support all the gloom.”
Bank of America Institute
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 analyses from across the bank and the world to provide timely and original perspectives on the economy, Environmental,