- US consumers are looking for some relief in prices
- US consumers have held up better than expected
Here were recent comments from Bank of America president of regional banking Dean Athanasia along the same lines. He was asked about the consumer:
Yes, consumer spend right now, I mean, we — our economists have pushed things out. So GDP not seeing a downturn, consumer spending not seeing a downturn out to 2025. So if you look at our economists, that’s what they’re looking at. So we — when I look at the data in the consumer bank, I see our clients are still holding, versus pre pandemic, about 27% more cash in their accounts on average. It’s more acute on the lower end. They’re holding between $2,500 to $5,000, on average, more cash in their accounts on the credit side. They’re still paying off their credit cards. I don’t know what the last group said here. But for our group, in our specific client base, they’re paying off at a higher rate than they ever have before. Still, it’s pretty high, it’s 4 percentage points higher than it was pre COVID. So they’ve got — that denotes solid quality there and they’re spending at about a 5% clip. So we see that maybe coming down a little bit, but they’re still spending at a pretty good clip and they’re sort of averaging down to where they were pre COVID. So in terms of consumer spending, that’s what we’re seeing. Again, this is across 64 million households out there and client base that we have. And so those are all the activities going up. They’re in good shape, and they’re angling down. They’re spending a little bit of it, but they still have, on the lower end, probably 2 to 3x more cash than they had pre COVID.
More:
It’s a million-dollar question. We’re — we think it will last by the way looking at from the — sort of the economy, it’s a slow travel down on the consumer side. They’re bringing in more cash. There is plenty of jobs out there. Obviously, they’re dealing higher interest rates, but they’ve got higher wages. They still have a lot of job openings out there. They can find employment and the cash is still coming in. So, I would say, slow angling down, getting to more normalized period out into first quarter of 2024, but you’re just going back to where we were sort of pre-COVID where we had moderate 2%, 3% growth in deposits and things like that revert back into that type of economy.