Consumer Checkpoint

No madness in March spending

Headshot of David Tinsley

David Tinsley

Headshot of Anna Zhou

Anna Zhou

Headshot of Taylor Bowley

Taylor Bowley

Headshot of Liz Everett Krisberg

Liz Everett Krisberg

April 2023

Consumer Checkpoint is a regular publication from Bank of America Institute. It aims to provide a holistic and real-time estimate of U.S. consumers’ spending and their financial well-being, leveraging the depth and breadth of Bank of America proprietary data. Any such Bank of America proprietary 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.

Key takeaways

  • After a strong start to the year, Bank of America credit and debit card spending per household moderated further in March, to 0.1% year-over-year (YoY), the slowest pace since February 2021. Sequentially, card spending per household fell 1.5% month-over-month (MoM), seasonally adjusted.
  • In our view, slowing wages, a drag from lower tax refunds, and the expiration of Supplemental Nutrition Assistance Program (SNAP) emergency allotments are driving the slowdown. Bank of America data shows after-tax wage and salaries growth slowed to just 2% YoY, down from the peak of 8% in April 2022. Meanwhile cumulative tax refunds are tracking around 10% lower than last year.
  • How concerned should we be about spending going forward? The good news is that consumers still have financial buffers as suggested by lower credit card utilization rates compared to 2019. However, signs of a cooling labor market and a sustained deceleration in wages could tilt the risks to the downside.