“They are in very good shape,” says Brian Moynihan on the U.S. consumer.  “They have money in their accounts; they’re employed, and their wages are growing.”

BofA runs the largest consumer banking business in the country.  Between November of 2022 and November of 2023, customer spending was up about 4.5% with December projected to be about the same. 

With unemployment at about 3.9%, the consumer is still strong.  The pre-pandemic cohort of consumers that had average balances of about $2,000-$5,000, went up to $12,800 post pandemic.  And this is just slightly down from the high of $13,400.  Mr. Moynihan thinks that consumers are dialing back spending due to inflation and fear of job losses.  However, spending is still up from the prior year, so this sets up a soft landing for the economy.

On the commercial side, he sees lines of credit usage going down slightly (40% down to about 34%), because rates have jumped (from 3-4% to 7-8%), and businesses are more worried about end demand.