September 24, 2023

The Catholic Transcript

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BofA says U.S. consumers, including low-income families, are still spending

ATMs in California, USA

(Reuters) – US consumer credit and debit card spending rose 15% in 2022 from a year earlier, according to a Bank of America survey on Wednesday. Inflation has not yet shifted to lower demand.

In fact, low-income families – often described as more vulnerable to the shock of inflation – were compared to their pre-infection purchases, the bank’s researchers found.

On the other hand, researchers at the Bank of America Institute said some of the group’s spending reflected high inflation, with the March consumer price index rising 8.5% in 12 months, the highest in more than 40 years. In addition, these households typically spend a large portion of their budgets on food, gasoline, and consumer goods, which contribute to rising prices.

“However, the amount of card spending in this group is still higher than in pre-epidemic levels: recent Bank of America debit and credit card spending data show that there has been a 33.3% increase between the group with less than $ 50,000 (annual income) through the family. Years, ”they wrote.

Bank of America researchers attribute the continued strength of the US job market. The unemployment rate is 3.6% – where it was before the epidemic – there are almost two jobs for every unemployed, and hourly wages are rising at an annual rate of 5.6.%, The fastest rate in years.

Another factor that keeps spending consistent, especially in low-income families, is the money they have at their disposal. Bank accounts are still well stocked with the remaining funds of successive rounds of federal incentives provided during high wages and epidemics.

(By Don Burns)


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