Bank of America Payments and Spending Data Shows Consumers Continue to Demonstrate Robust Spending Growth Despite Cross-currents from Rising Utility and Childcare Costs
The number of customers making childcare payments in August was approximately 94% of pre-pandemic levels, as parents are returning to the labor market
The Bank of America Institute released a new publication today which shows consumer spending continues to increase in August, but some consumers are feeling the effects of rising utility and childcare costs. Bank of America internal data suggests that the average utility payment increased by 16% year-over-year in August, largely offsetting the relief consumers may feel from falling gas prices. However, given demand for energy increases with heat waves, we may not have seen all of these utility increases reflected in bills yet, so average spending could continue to rise in September.
According to Bank of America internal data, the dollar value of childcare payments per customer across payment channels (ACH, credit card, debit card, and online bill pay) was up 9.7% year over year in August. This increase is partially due to higher prices of about 3%, as indicated by the daycare and preschool component of the most recent CPI report, suggesting roughly a 7% increase in inflation-adjusted spend in this category. Economic data suggests that parents – especially women between 25-54 – are returning to the labor market, and the number of Bank of America customers making childcare payments was almost at pre-pandemic levels in August, at around 94% of the level seen in January 2020.
Other highlights of the publication include:
“Consumers are heading into the fall with solid spending and savings buffers,” said David Tinsley, senior economist for the Bank of America Institute. “While the drop in gasoline prices has boosted sentiment, consumers have been feeling some pressure from rising utility bills.”
Consumer Checkpoint is a regular publication from the Bank of America Institute. It aims to provide a holistic and real-time estimate of US consumers’ spending and their financial well-being, leveraging the depth and breadth of Bank of America proprietary data. Such data is not intended to be reflective or indicative of, and should not be relied upon as, the results of operations, financial conditions, or performance of Bank of America.
See the Consumer Checkpoint for methodology and definitions.
The Bank of America Institute is dedicated to uncovering powerful insights that move business and society forward. Established in 2022, the Institute is a think tank that draws on data and analyses from across the bank and the world to provide timely and original perspectives on the economy, Environmental, Social and Governance (ESG), and global transformation. The Institute leverages the depth and breadth of the bank’s proprietary data, from 67 million consumer and small business clients, 54 million verified digital users, $3.8T in total payments in 2021 and $1.4T in consumer and wealth management deposits. From this robust data set, the Institute provides a unique perspective on the health of the economy. It also elevates thought leadership from throughout the bank that addresses long-term trends and shares these findings with the general public.
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