Consumers are financially resilient, regardless of excessive inflation and considerations the U.S. is nearing a recession, based on Bank of America CEO Brian Moynihan.
“Analysts may ponder whether the discuss of inflation, recession and different elements might [result] in a slower spending development,” Moynihan mentioned Monday throughout a convention name to debate third-quarter outcomes that topped analysts’ expectations. “We simply do not see [that] right here at Bank of America.”
The financial institution’s clients proceed to spend freely, utilizing their bank cards and different cost strategies for 10% extra transaction volumes in September and the primary half of October than a 12 months earlier, Moynihan mentioned. While value inflation accounts for a few of that, the variety of transactions additionally rose 6%, he mentioned.
Customers’ account balances stay greater than earlier than the coronavirus pandemic struck in early 2020, Moynihan mentioned, indicating they had been in an excellent place to proceed spending. That is particularly true for many who had the smallest balances, which had been about 5 instances greater than earlier than the pandemic, based on a Bank of America chart.
Finally, client credit score stays pristine, with late-payment metrics nonetheless effectively under pre-2020 averages, Moynihan mentioned, indicating that thus far, clients had little problem maintaining with their debt.
“We’re simply now seeing [a] gradual transfer off these lows in early stage delinquencies; late-stage delinquencies are nonetheless 40% under pre-pandemic,” Moynihan mentioned.