Consumer Checkpoint: Amidst the freeze, is confidence thawing?

Though winter weather softened spending in January, consumers’ sentiment is on the rise and their financial health remains strong.

Headshot of David Tinsley

David Tinsley

Headshot of Taylor Bowley

Taylor Bowley

Headshot of Liz Everett Krisberg

Liz Everett Krisberg

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Vanessa Cook

February 2024

Key takeaways

  • Consumer spending softened in January with total card spending per household falling by 0.2% year-over-year (YoY), after a 0.2% YoY rise in December, according to Bank of America internal data. On a seasonally adjusted (SA) basis, per household spending dropped 0.3%.
  • The weather appears largely to blame for the weakness in January as it was cold and snowy and/or rainy in large parts of the country. Yet, where the weather was better, such as the West, spending was resilient, and in the later part of the month, total card spending per household rebounded across the country.
  • Despite the freeze, consumer confidence has rebounded as of late. It does, however, remain relatively weak given the consumer has been resilient over the last year and the labor market has been solid. Why? 'Sticker shock' from higher prices is a good part of the explanation.
  • As the rate of inflation comes down this sticker shock should begin to fade, particularly as after-tax wages and salaries growth remains healthy for low and middle-income households in our data. Consumers' savings buffers remain elevated and Bank of America's latest Participant Pulse shows no significant sign that people are tapping into their longer-term retirement savings.

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.