September 2024
Consumer Checkpoint: Tapping the brakes?
Strength in wages is supporting consumer spending and cushioning rising costs of auto loans. Plus, housing costs are easing.
Key takeaways
- Bank of America aggregated credit and debit card spending per household rose 0.9% year-over-year (YoY) in August, rebounding from the 0.4% YoY decline in July. On a month-over-month (MoM) basis, spending in August decreased 0.2% after rising 0.3% in July. In our view, this reflects a normalization of consumer spending as opposed to a weakening. Within the total, services spending momentum remains stronger than goods.
- Housing cost inflation is easing for both homeowners and renters. Bank of America data on 'new rents' for people who move within the same city indicates that rental payments have flattened out. Over time, this may mean renters have more to spend on other things and further close the gap to homeowner spending.
- However, one risk to consumer spending emerges from the small proportion of households that have seen significant rises in their monthly auto loan repayment as a result of higher car prices and financing rates.
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.
