Shoppers are spending extra in 2020 than they did in 2019, says Financial institution of America CEO
Consumers are spending more via Bank of America accounts this year, in the midst of the coronavirus pandemic, than they did in 2019, according to CEO Brian Moynihan.
“When you look at what they’re spending year-to-date, they’ve spent more in 2020 than they did in 2019, and that is now across $2.7 trillion in money moved by our consumers,” Moynihan told CNBC’s Wilfred Frost in a Wednesday interview.
Moynihan’s commentary is the latest indication that, despite a record level of infections and a mounting death toll, many Americans are showing a surprising financial resilience. Earlier in the pandemic, U.S. banks set aside tens of billions of dollars for loan losses, but defaults have yet to materialize. That’s in part due to unprecedented federal actions to stabilize markets and inject money into households and businesses.
“Way back in May, you could see it flattening out and starting to grow,” Moynihan said of the spending data. “Now it’s really grown every month since then. The month of November was up about 4% over the last November, and the month of December so far is up double digits.”
Some of the surge in spending this month has been because transactions that normally happen during Thanksgiving week got pushed into December due to Covid-related restrictions, Moynihan said.
While spending at restaurants is down 25% year over year, transactions tied to home improvement have made up for the drops elsewhere, he said.
Despite the positive signs, Moynihan said that another round of stimulus is needed to support the unemployed and small businesses. Lawmakers are locked in negotiations over a last ditch attempt to approve a relief package before year-end.