Read our full analysis for a more in-depth look at these trends.
Deposit trends: a mild tailwind for "K" shape narrowing
A rise in deposits should support younger and lower-income consumers most, helping narrow the “K” shape further.
June 2026
Key takeaways
- Household deposit balances rose across all income groups in early 2026, boosted partly by larger tax refunds, with the biggest relative increases for lower-income households, according to Bank of America deposit data. This provides a near-term buffer for spending, though these gains are likely to prove transitory as balances typically decline later in the year.
- For younger and lower-income households, these deposits could be drawn down faster this year, reflecting mounting cost pressures. Much will depend on whether the upturn in the labor market and improved lower- and middle-income wage growth we have seen in Bank of America internal data persist through the summer.
- The latest Bank of America Proprietary Market Landscape Insights Study finds that around half of lower-income households describe their finances as "poor" or "terrible." However, in our view, lower gasoline prices, combined with higher deposits, could be a mild tailwind to narrowing the "K" shape in spending growth.
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