Banking CEO talks consumer spending
NEW YORK – The head of the nation’s second-largest bank said consumers are spending “at a faster rate” than he’s ever seen but he remains concerned about how inflation and supply-chain issues will influence the economy going into the winter.
In an interview this month with The Associated Press, Bank of America Chairman and CEO Brian Moynihan said spending on the bank’s debit and credit cards has surged as the economy recovered from recession.
But Moynihan also said a recent decline in consumer sentiment – by one measure to the lowest point in a decade – may indicate higher costs are adding to Americans’ frustration with the ongoing pandemic.
“(The consumer) is earning more money, but now they are worried that these costs are going to go up faster than their wages,” he said.
On Friday, the government said prices for U.S. consumers jumped 6.8% in November compared with a year earlier as surging costs for food, energy, housing and other items left Americans enduring their highest annual inflation rate in 39 years.
For now, consumer spending is holding up, giving Moynihan confidence in the economy. Plus, unemployment is at post-pandemic lows, wages are rising, and GDP growth is expected to top 5% this quarter.
Moynihan said he’s feeling confident about where the economy stands. He said debit and credit card spending for Thanksgiving Day through Cyber Monday rose 13% from 2019 levels. For November, spending on the bank’s credit and debit cards was up 27% compared to November 2019.
“The U.S. consumer is spending money, a lot of money, spending at a faster rate than I have ever seen, and I’ve been tracking this data for 15 years,” he said.