BofA Data Finds Overall Consumer Spending Continued to Grow in October though at a Slower Pace than Prior Months
Bank of America Institute released a new publication today which shows that discretionary consumer spending per household continued to increase in October, up 2.9% year over year (YoY) but down from 3.2% in September, according to Bank of America (BofA) internal data.
Middle- and higher- income households ($50-125k and >$125k, respectively) have replaced lower-income households as the main driver for growth in discretionary spending. In October, the lower-income group contributed just one-fifth of the growth in discretionary spending, compared with approximately two-fifths in October of 2021. This is likely due to lower-income groups being the most negatively impacted by surging prices.
One area that may buck the trend of slowing discretionary growth is autos. The recent lack of supply has pushed up car prices, and the average auto loan repayment by Bank of America customers jumped 7% YoY in October. But there is a silver lining: there should be a well of pent-up demand as disruptions ease.
Other highlights of the publication include:
“Our internal data illustrates that the consumer still has forward momentum, though holiday spending looks a little tepid right now,” said David Tinsley, senior economist for Bank of America Institute. “A rebound in auto supply has the potential to mean car purchases could partially offset an overall slowdown in discretionary spending.”
Consumer Checkpoint is a regular publication from Bank of America Institute. It aims to provide a holistic and real-time estimate of US consumers’ spending and their financial well-being, leveraging the depth and breadth of Bank of America proprietary data. Such 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.
See the Consumer Checkpoint for methodology and definitions.
Bank of America Institute is dedicated to uncovering powerful insights that move business and society forward. Established in 2022, the Institute is a think tank that draws on data and analyses from across the bank and the world to provide timely and original perspectives on the economy, Environmental, Social and Governance (ESG), and global transformation. The Institute leverages the depth and breadth of the bank’s proprietary data, from 67 million consumer and small business clients, 54 million verified digital users, $3.8T in total payments in 2021 and $1.4T in consumer and wealth management deposits. From this robust data set, the Institute provides a unique perspective on the health of the economy. It also elevates thought leadership from throughout the bank that addresses long-term trends and shares these findings with the general public.
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Melissa Anchan, Bank of America