Total payments increased 7% year over year in July; Consumers feel relieved by lower gas prices, but many feel pressured by rising rents
NEW YORK, August 9, 2022 /PRNewswire/ — The Bank of America Institute has released a New article today, which shows that consumer spending continues to rise in July, but that some consumers are feeling the effects of rising rents. Internal data from Bank of America suggests that median rent payments rose 7.4% year over year in July. That said, there are plenty of reasons to remain optimistic about the continued resilience of US consumers: lower gasoline prices gave consumers relief in July, and retailer promotional events boosted spending on goods. In addition, household deposit and savings balances remain elevated and consumers have yet to show signs of increased borrowing.
Highlights of the release:
- Bank of America’s total payments rose 7% year-over-year in July, roughly in line with June data; this figure provides a holistic view of money flows and includes credit cards, debit cards, automated clearing house, wire transfers, bill payment, person-to-person, cash and checks.
- Spending on cards per household rose 5.3% year-on-year, from 5.7% in June. With U.S. consumer price index inflation at 9.1% in June and personal consumption expenditure (PCE) inflation at 6.8%, it appears that “real spending (adjusted for inflation)” continue to be under pressure.
- According to internal Bank of America data, all income groups are feeling the impact of rising rents, with the largest rent increase seen by households with incomes between $51,000-150,000.
- Young consumers are the most affected by rising 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 low-income households ($50,000 per year), compared to a peak of nearly 10% in June.
“Our internal spend and payment data suggests consumers aren’t wilting in this summer heat,” said Anna Zhou, an economist at the Bank of America Institute. “As wallets are tight for the 34% of U.S. households who are renters, relief from lower gas prices and retail promotions encouraged consumers to keep spending through July. “
About the consumer checkpoint
Consumer Checkpoint is a regular publication of the Bank of America Institute. It aims to provide a global, real-time estimate of US consumer spending and financial well-being, leveraging the depth and breadth of Bank of America’s proprietary data. This data is not intended to be representative or indicative of Bank of America’s operating results, financial conditions or performance and should not be relied upon as such.
See consumer checkpoint for methodology and definitions.
About the Bank of America Institute
The Bank of America Institute is dedicated to uncovering powerful ideas that move business and society forward. Established in 2022, the Institute is a think tank that draws on data and analysis from across the bank and the world to provide timely and original insights on economic, environmental, social and governance (ESG) and global transformation. The Institute taps into the depth and breadth of the bank’s proprietary data, sourced from 67 million retail and small business customers, 54 million verified digital users, $3.8T of total payments in 2021 and $1.4T in consumer deposits and wealth management. From this solid data set, the Institute offers a unique perspective on the health of the economy. It also elevates thought leadership across the bank that addresses long-term trends and shares those findings with the general public.
Bank of America
Bank of America is one of the world’s leading financial institutions, serving individuals, small and medium-sized businesses, and large corporations with a full range of banking, investment, asset management, and banking products and services. other financial and risk management products and services. The company offers unparalleled convenience in United States, serving approximately 67 million retail and small business customers with approximately 4,000 retail financial centers, approximately 16,000 ATMs and award-winning digital banking services 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 businesses, governments, institutions and individuals worldwide. whole world. Bank of America provides 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 its customers through operations across United States, its territories and about 35 countries. Bank of America Corporation (NYSE: BAC) shares are listed on the New York Stock Exchange.
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SOURCE Bank of America Corporation