Consumer Checkpoint: The kids are alright (for now)

Gen Z and Millennial spending is boosted by labor market strength, but slowing discretionary spending could suggest pressure.

Headshot of David Tinsley

David Tinsley

Headshot of Anna Zhou

Joe Wadford

Headshot of Liz Everett Krisberg

Liz Everett Krisberg

Headshot of Taylor Bowley

Taylor Bowley

Headshot of Vanessa Cook

Vanessa Cook

June 2024

Key takeaways

  • Consumer spending momentum continues to appear soft but stable. According to Bank of America internal data, total card spending per household was up 0.7% year-over-year (YoY) in May, following the 1.0% YoY increase in April.
  • The gap between older and younger generations' spending growth has narrowed, which could reflect the fading impact of the 2023 cost-of-living adjustment (COLA) on social security benefits, alongside strong after-tax wage growth for younger cohorts.
  • That said, Gen Z and younger Millennials' share of spending on discretionary items is declining potentially due to increasing spending commitments as they get older. However, higher costs in non-discretionary services is also a headwind, in our view. To counter these pressures we find some evidence that the younger generations are 'trading down' in grocery shopping and restaurant decisions.
  • The strength in the younger generations' labor market, including wages and salaries growth, has allowed a majority to navigate these challenges, but there are signs of increased financial pressures for some.

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.

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