Consumers are financially resilient, despite high inflation and concerns the U.S. is nearing a recession, according to Bank of America CEO Brian Moynihan.
“Analysts might wonder whether the talk of inflation, recession and other factors could [result] in a slower spending growth,” Moynihan said Monday during a conference call to discuss third-quarter results that topped analysts’ expectations. “We just don’t see [that] here at Bank of America.”
The bank’s customers continue to spend freely, using their credit cards and other payment methods for 10% more transaction volumes in September and the first half of October than a year earlier, Moynihan said. While price inflation accounts for some of that, the number of transactions also rose 6%, he said.
Customers’ account balances remain higher than before the coronavirus pandemic struck in early 2020, Moynihan said, indicating they were in a good position to continue spending. That is especially true for those who had the smallest balances, which were about five times higher than before the pandemic, according to a Bank of America chart.
Finally, consumer credit remains pristine, with late-payment metrics still well below pre-2020 averages, Moynihan said, indicating that so far, customers had little difficulty keeping up with their debt.
“We’re just now seeing [a] gradual move off these lows in early stage delinquencies; late-stage delinquencies are still 40% below pre-pandemic,” Moynihan said.
