Total payments increased 7% year over year in July; Consumers
feel relief from lowering gas prices but many are feeling squeezed
from rising rents
YORK, Aug. 9, 2022 /PRNewswire/ -- The Bank of
America Institute published a new article today which shows
consumer spending continues to increase in July but some consumers
are feeling the effects of rising rents. Bank of America internal
data suggest median rent payments increased by 7.4% year-over-year
in July. That said, there are many reasons to remain positive about
the steady resilience of US consumers: lower gas prices provided
some relief to consumers in July, and promotional events from
retailers boosted spending on goods. Additionally, households'
deposit and savings balances remain elevated and consumers have not
yet shown signs of increased borrowing.
Highlights of the publication:
- Bank of America total payments increased 7% year over year
in July, roughly in line with June's data; this figure offers a
holistic view of money flow and includes credit card, debit card,
Automated Clearing House, wires, bill pay, person-to-person, cash
- Card spending per household increased by 5.3% year over
year, down from 5.7% in June. With US Consumer Price
Index inflation at 9.1% in June and Personal Consumer Expenditure
(PCE) inflation at 6.8%, it appears "real (inflation-adjusted)
spending" continues to be under pressure.
- According to internal Bank of America data, all income groups
are feeling the impact of higher rents, with the biggest rent
increase seen by those households with income between $51,000-150,000.
- Younger consumers are getting squeezed the most by higher
rent inflation with median payment up 16% year over year
in July for Gen Z, compared to just 3% for Baby Boomers.
- As oil prices fell throughout July, average gas spending as
a share of total card spending per household fell to 9.3% in
June for lower-income households (<$50k per year), down from a peak of nearly 10% in
"Our internal spending and payments data suggests consumers are
not wilting in this summer heat," said Anna
Zhou, economist for the Bank of America Institute. "While
wallets are getting squeezed for the 34% of US households who are
renters, relief from lower gas prices and retail promotions
encouraged consumers to continue to spend throughout July."
About the Consumer
Consumer Checkpoint is a regular publication from the 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.
About the Bank of America
The 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.
Bank of America
Bank of America is one of the world's leading financial
institutions, serving individual consumers, small and middle-market
businesses and large corporations with a full range of banking,
investing, asset management and other financial and risk management
products and services. The company provides unmatched convenience
in the United States, serving
approximately 67 million consumer and small business clients with
approximately 4,000 retail financial centers, approximately 16,000
ATMs, and award-winning digital banking with approximately 55
million verified digital users. Bank of America is a global leader
in wealth management, corporate and investment banking and trading
across a broad range of asset classes, serving corporations,
governments, institutions and individuals around the world. Bank of
America offers industry-leading support to approximately 3 million
small business households through a suite of innovative,
easy-to-use online products and services. The company serves
clients through operations across the
United States, its territories and approximately 35
countries. Bank of America Corporation stock (NYSE: BAC) is listed
on the New York Stock Exchange.
Reporters may contact:
Melissa Anchan, Bank of
View original content to download
SOURCE Bank of America Corporation