Spending and Saving Both on the Rise, According to Bank of America CEO
Brian Moynihan, Bank of America CEO, recently revealed that American consumers are both spending more money and saving more money, noting that spending on the bank’s cards has increased as much as 20 percent since the beginning of 2021.
“When you look at the core spending levels of consumers, they continue to be very strong,” Moynihan told CNBC’s Jim Cramer, according to PYMNTS. “The second thing is that consumers have more money in their account. So in the month of January their accounts grew again, especially for consumers that carry lower balances.”
This finding goes directly against concerns last year that consumer bank balances would decline when federal COVID-19 stimulus checks stopped coming. Additionally, the U.S. Department of Commerce announced that in January, retail sales saw their biggest gain in 10 months, recovering 3.8 percent after a severe 2.5 percent decline in December.
The retail gain was brought on by a 14.5 percent rise in eCommerce, a 9.2 percent increase at department stores, a 7.2 percent increase in home furnishing sales, and a 4.1 percent month-over-month growth in gardening equipment and building materials.
Additionally, Bank of America experienced record digital engagement last year. With 16 million active Zelle accounts, Zelle transactions outnumbered paper checks for the first time. 70 percent of households were using Zelle’s digital platforms, and 41.4 million active digital banking users made 2.7 billion logins.