August 2024
Consumer Checkpoint: Facing hurdles or the high jump?
Spending momentum has slowed and consumers are more price sensitive, but elevated deposits and positive wage growth offer support.
Key takeaways
- Bank of America aggregated credit and debit card spending per household fell 0.4% year-over-year (YoY) in July, compared to a 0.5% YoY decline in June. Within the total, services spending was stronger than goods. International travel remains a highlight, with consumers flocking to the Paris Olympics and Taylor Swift concerts.
- The labor market is showing more signs of cooling. But, for now, Bank of America internal data on after-tax wages and salaries growth remains supportive of consumer spending.
- We think households have managed to eke out some volume growth in their spending despite the weaker growth in nominal spending per household. To do this, consumers are becoming more price sensitive, and we see stronger spending in value groceries and clothing than in these categories overall.
- One reason for increased price sensitivity may be the diminishing savings buffers consumers have, especially after allowing for inflation. But while deposits have fallen back, in our view, they remain modestly supportive of the consumer.
Read our full analysis for a more in-depth look at these trends.
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.
