Bank of America CEO says U.S. consumers and businesses have turned cautious on spending
Bank of America CEO says U.S. consumers and businesses have turned cautious on spending
U.S. Spending Cautiousness Amid Inflation and Interest Rates
Slowing Purchase Rates
Bank of America clients, from households to small and medium-sized businesses, are reducing their spending on a variety of goods and services, indicating a cautious approach due to economic concerns.
Reduced Consumer Spending Growth
Consumer spending growth has decelerated to about 3.5% this year, a significant drop from the nearly 10% growth observed in May 2023, reflecting heightened caution among U.S. consumers.
Impact of Inflation and Interest Rates
Elevated inflation and higher borrowing costs continue to influence spending behaviors, with consumers seeking better deals and businesses slowing down on hiring and purchases.
Economic Outlook
Despite the slowdown, the U.S. economy is expected to grow at around 2% and avoid recession, with hopes that inflation will be under control by the end of next year and interest rates potentially being cut.
What specific types of purchases have Bank of America clients, both households and businesses, reduced according to CEO Brian Moynihan?
Bank of America clients, encompassing both households and small- to medium-sized businesses, have reduced their rate of purchases across a broad range of items. According to CEO Brian Moynihan, these reductions span from hard goods to software4. This indicates a general slowdown in spending on both physical products and digital services among the bank's clientele.
How much has consumer spending grown this year, and how does this compare to the growth rate seen in May 2023?
This year, consumer spending has grown by approximately 3.5% to around $4 trillion, according to Bank of America CEO Brian Moynihan. This growth rate represents a significant slowdown compared to the nearly 10% growth rate observed in May 2023.