Discretionary Spending per Household grew 2.9%
YoY in October; Services Spending Continued to Outperform Spending
on Goods
NEW
YORK, Nov. 10, 2022 /PRNewswire/ -- Bank of
America Institute released a new publication today which shows
that discretionary consumer spending per household continued to
increase in October, up 2.9% year over year (YoY) but down from
3.2% in September, according to Bank of America (BofA) internal
data.
Middle- and higher- income households ($50-125k and
>$125k, respectively) have
replaced lower-income households as the main driver for growth in
discretionary spending. In October, the lower-income group
contributed just one-fifth of the growth in discretionary spending,
compared with approximately two-fifths in October of 2021. This is
likely due to lower-income groups being the most negatively
impacted by surging prices.
One area that may buck the trend of slowing discretionary growth
is autos. The recent lack of supply has pushed up car prices, and
the average auto loan repayment by Bank of America customers
jumped 7% YoY in October. But there is a silver lining: there
should be a well of pent-up demand as disruptions ease.
Other highlights of the publication include:
- Bank of America total payments increased 9% year over year
(YoY) in October; this figure offers a holistic view of
money flow and includes credit card, debit card, ACH (automated
clearing house), wires, bill pay, person-to-person, cash and
checks.
- Within this, overall credit and debit card spend, which
makes up over 20% of total payments, was up 8% YoY.
- Total card spending per household was up 3.1% YoY in
October, down from 4.4% YoY in September, and remained lower
than inflation.
- The slowing of the housing market contributed to weaker goods
spending, with furniture spending down more than 10% YoY
(over 20% YoY once adjusted for inflation).
- Overall, spending on services continued to look in better
shape. In October, services spending, including restaurants and
travel, remained well into the positive territory on a %YoY basis,
though airline and lodging spending did moderate sharply.
"Our internal data illustrates that the consumer still has
forward momentum, though holiday spending looks a little tepid
right now," said David Tinsley,
senior economist for Bank of America Institute. "A rebound in auto
supply has the potential to mean car purchases could partially
offset an overall slowdown in discretionary spending."
About the Consumer Checkpoint
Consumer Checkpoint is a regular publication from Bank of
America Institute. It aims to provide a holistic and real-time
estimate of US consumers' spending and their financial well-being,
leveraging the depth and breadth of Bank of America proprietary
data. Such data is not intended to be reflective or indicative of,
and should not be relied upon as, the results of operations,
financial conditions, or performance of Bank of America.
See the Consumer Checkpoint for methodology and definitions.
About Bank of America Institute
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, Social and Governance
(ESG), and global transformation. The Institute leverages the depth
and breadth of the bank's proprietary data, from 67 million
consumer and small business clients, 54 million verified digital
users, $3.8T in total payments in
2021 and $1.4T in consumer and wealth
management deposits. From this robust data set, the Institute
provides a unique perspective on the health of the economy. It also
elevates thought leadership from throughout the bank that addresses
long-term trends and shares these findings with the general
public.
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 68 million consumer and small business clients with
approximately 3,900 retail financial centers, approximately 16,000
ATMs and award-winning digital banking with approximately 56
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, visit the Bank of America newsroom
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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