image

U.S. consumers, low-income households included, still spending, BofA research says

To be sure, Bank of America Institute researchers said some of that group’s spending will reflect high inflation, with March’s consumer price index registering an 8.5% year-over-year increase, the highest in over 40 years. Also, such households typically spend a higher share of their budgets on food, gas and utilities, which contributed most heavily to the CPI increase.

“But the level of card spending in this group is still way above pre-pandemic levels: the very latest Bank of America debit and credit card spending per household data shows card spending up 33.3% among the below $50K group in three years to the week of 9th April,” they wrote.

Card spending this year through April 8 was 15% higher than in the same period last year.

Surveys such as the University of Michigan’s widely followed Consumer Sentiment Index have painted a picture of U.S. consumers who are the most distressed about the economy in more than a decade, often a signal that they may rein in spending.

“But people don’t always actually do what they say they are doing – sentiment is not the same as action,” the bank wrote.

“The actual hard data does not support the gloom.”

Data from the Census Bureau due out on Thursday in fact is expected to show U.S. retail sales rose 0.6% in March from the month before, a Reuters poll of economists shows, which would mark an acceleration from February’s increase of 0.3%.

Monthly growth in retail sales averaged 1.4% over the 12 months through February, more than three times the rate that prevailed in the year before the pandemic.

Bank of America researchers attributed the ongoing strength in large part to the U.S. job market. The unemployment rate is 3.6% – roughly where it was before the pandemic – there are nearly two open jobs for every unemployed person and hourly wages are rising at their fastest in years, at an annual rate of 5.6%.

“(B)eneath this already rosy picture, the story is even better at the lower end of the wage distribution,” they said. Wages in the lowest-paying industries such as leisure and hospitality are up 11.8% year over year.

Another factor continuing to prop up spending, especially among low-income households, is the cash remaining at their disposal. Bank accounts are still well stocked from higher wages and residual funds from repeated rounds of federal stimulus during the pandemic.

Households with incomes below $50,000 a year have at least $1,500 more in the bank than they did at the start of 2019, a figure that represents 5% of that income group’s household spending that year.

“It is hard to reconcile high bank balances and high card spending with the idea that lower income households are being overwhelmed by higher prices,” the researchers wrote.

(Reporting By Dan Burns; Editing by Bradley Perrett)


Source link

0 0 votes
Article Rating

 
S’abonner
Notifier de
0 Commentaires
Commentaires en ligne
Afficher tous les commentaires
Reset Password

Avertissement sur les risques :

Le trading peut vous exposer à des risques de pertes supérieures aux dépôts et ne convient qu’à une clientèle avisée ayant les moyens financiers de supporter un tel risque. Les CFD sont des instruments complexes et présentent un risque élevé de perte rapide en capital en raison de l’effet de levier. Entre 74 et 89% des comptes de clients de détail perdent de l’argent lors de la négociation de CFD. Vous devez vous assurer que vous comprenez comment les CFD fonctionnent et que vous pouvez vous permettre de prendre le risque élevé de perdre votre argent. Ce site n’est en aucun cas une offre de conseil en investissement ni une incitation quelconque à acheter ou vendre des instruments financiers. Trader le Forex et/ou les CFD’s implique un niveau de risque élevé, et peut ne pas être approprié car vous pouvez subir des pertes supérieures à votre dépôt. L’effet de levier peut être en votre défaveur.

Vous devez être conscient et avoir une compréhension complète de tous les risques associés au marché et au trading. Le site Union-trader.com peut être amené à produire des commentaires d’ordre général, ce qui ne constitue pas des conseils en investissement et ne doit pas être interprété comme tel.

Veuillez recourir aux conseils d’un conseiller financier extérieur. Le site Union-trader.com décline toute responsabilité pour les erreurs, inexactitudes ou omissions et ne garantit pas l’exactitude ou le caractère complet des informations, textes, graphiques, liens ou autres éléments contenus dans cette documentation. Toute information et toute mise à disposition sur le site ont un caractère privé.