US consumers are in good financial shape and are managing well in a high inflationary environment, Bank of America CEO Brian Moynihan said. Account balances for consumers are higher now than they were pre-pandemic, he told Bloomberg. Investors have been rattled by financial updates from retailers such as Target and Walmart. Loading Something is loading.
US consumers are in solid financial shape and have enough money in their accounts to keep spending, Bank of America CEO Brian Moynihan told Bloomberg on Tuesday.
His message comes as stock investors have been rattled by signs of flagging consumer activity, including weak quarterly reports last week from retail heavyweights Target and Walmart.
“[You] have consumers in good shape, not over-leveraged,” he said on Bloomberg Television during the World Economic Forum’s annual meeting in Davos, Switzerland.
“The account balances of the consumer pre-pandemic to now are multiples bigger,” said the chief of the second-largest bank by assets in the US. “The idea that they spent the pandemic money that came in January, March last year, just not true.”
Investors appear increasingly worried about how well consumers are holding up in the face of inflation that’s burning above 8%. The S&P 500 last week briefly dropped into a bear market after the disappointing retail earnings.
And on Tuesday, stocks sold off early after social media company Snap issued a profit warning, saying macroeconomic challenges will likely hurt advertising sales.
“In the first two weeks of May, the consumer spent 10% more than they did last May. That’s over top of the payments that went out to pay taxes” in April, Moynihan said. “What’s going to slow [consumers] down? Nothing right now.”
America “is much different than Europe and other places because of this dynamic of the vibrancy of US consumer,” he said.
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