May 2024
Consumer Checkpoint: April flowers, not showers
Consumer spending and wage momentum continues, especially for lower-income cohorts, but property insurance costs pose risks.
Key takeaways
- Total card spending per household rose 1.0% year-over-year (YoY) in April, following a rise of 0.3% YoY in March. Recent data has been noisy due to the early Easter, the leap year and other seasonal factors. Looking through these gyrations, spending momentum appears to continue to be relatively soft but stable.
- Lower-income spending growth remains above that of higher-income households in Bank of America data. And it appears lower-income households' after-tax wages and salary growth has risen, while savings buffers remain. But the apparent cooling in the labor market warrants close watching from here.
- Tax refunds have been skewed towards lower-income cohorts. But while they appear to have spent some of these on retail, we see signs that they increased debt payments, possibly dampening some tax refund boosts to spending.
- Rising property insurance costs are a significant headwind for consumers. Some of the reasons for higher insurance payments are likely to be persistent.
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.
