Bank of America Merrill Lynch CEO Brian Moynihan has confidence in the American consumer.
In an interview with CNBC’s Wilfred Frost, Moynihan said that based on BAML’s credit and debit card data, consumers are spending plenty of money. This, in turn, paints a strong economic picture.
“The year-to-date consumers on our debit and credit cards are spending 4.7% more than they did last year and the pace is accelerating,” said Moynihan. “So, the consumer is in very good shape credit quality wise, spending wise.”
Additionally, Moynihan said that possible stumbling blocks for consumer confidence don’t seem to be materialising. Here’s Moynihan:
“And if you thought about what could slow them down, it’d be confidence in the markets. Those seem to be in good shape. It could be confidence in the economy, not growing as fast as we want but continuing to grow. Unemployment levels. ‘Am I going to have a job? Am I going to get paid more?’ You’re seeing wage growth. Not, again, what people would like to see, but in the twos. Unemployment’s staying low. So, the consumer’s very constructive.”
Moynihan’s argument is strong given that consumer confidence is near its highest level since the end of the recession, the stock market is near all-time highs, wages are growing at the fastest pace of the recovery, and the unemployment rate is below 5%.
In Moynihan’s view the good news is only getting better, as consumer spending on BAML’s cards is getting stronger as the year goes on.
“Well, as you look at the month of August, which we just got the final details on, it will be the strongest consumer spending growth in debit and credit cards year over year this year,” said Moynihan to CNBC.
Given that consumption makes up roughly 70% of the US economy, increased spending is good news for economic growth and hearing it from the CEO of one of the country’s largest banks is certainly encouraging.
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