BofA Data Finds that 2023 is off to a Strong Start for Consumer Spending, With Credit and Debit Card Spending Per Household up 5.1% Year-over-Year in January
NEW YORK, NY – Bank of America Institute released new analysis today which shows signs of a strengthening in consumer spending at the start of 2023. BofA credit and debit card spending per household rose 5.1% year-over-year (YOY) in January, compared to 2.2% YoY in December. While this increase includes the impact that the Omicron variant had on consumer spending in January 2022, a variety of factors are boosting the consumer this year:
Households continue to feel headwinds from rising costs like rent and food inflation, areas which have a greater impact on lower-income consumers. It seems unlikely, however, that a tipping point in spending will be reached in the near term. Consumers continue to have elevated savings, even adjusting for inflation, suggesting they have not yet reached their financial limits. While BofA internal data suggests median household savings and checking balances across income groups have been trending down since April 2022, the spending of lower-income consumers does not look high relative to their savings. Additionally, deposits remain above pre-pandemic levels for all income groups.
Other highlights of the Consumer Checkpoint include:
“While spending was slowing towards the end of 2022, consumers have entered the new year with a spring in their step” said David Tinsley, senior economist for Bank of America Institute. “With favorable macro tailwinds like the strength of the labor market and income gains, we have reasons to be hopeful that this increase is not just a blip but rather a longer-lasting trend.”
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 condition, 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, 56 million verified digital users, $4.2T in total payments in 2022 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