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Shoppers are financially resilient, regardless of excessive inflation and issues the U.S. is nearing a recession, in keeping with Financial institution of America CEO Brian Moynihan.
“Analysts may wonder if the discuss of inflation, recession and different elements might [result] in a slower spending progress,” 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 Financial institution 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. Whereas value inflation accounts for a few of that, the variety of transactions additionally rose 6%, he mentioned.
Clients’ account balances stay larger than earlier than the coronavirus pandemic struck in early 2020, Moynihan mentioned, indicating they had been in a superb place to proceed spending. That’s very true for many who had the smallest balances, which had been about 5 occasions larger than earlier than the pandemic, in keeping with a Financial institution of America chart.
Lastly, shopper credit score stays pristine, with late-payment metrics nonetheless nicely under pre-2020 averages, Moynihan mentioned, indicating that up to now, 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.
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