00:00 Speaker A
So let’s let’s talk about the American consumer David, our friends and and neighbors and how much they’re spending, where they’re spending. You say here April showers have not dampened spending yet. Walk us through the data, David. What what are you seeing?
00:18 David
Yeah, great to be here, Josh. So, what we’re seeing is that consumer spending still had forward momentum over the first sort of three months of this year when we look at our 69 million Bank of America customers. We still see them spending on credit and debit cards and increasing that spending. And then there’s we get into April, so there’s post these tariff announcements. Obviously, at a time when consumers are less confident, they have still been spending. So, in the first three weeks of April, the the seven days to April the 19th, spending on credit and debit cards in our data was up 3.1%. So still spending, I think.
01:57 Speaker A
So one tricky question you David for economist like yourself is as they’re spending, how much of that do you think David is that they are buying ahead of potential tariff impact?
02:16 David
Yeah, I mean, I think this is a great point. So, basically, when you look at when we when we parse our data, when we look at particular consumer durables, so we’re thinking their electronics, furniture, building materials. We did see a ramp in March and into April, and I think particularly two areas, I think in particular likely in in that. One’s electronics and the other is autos. So separately, when we look at our auto loan applications data, what we saw is that in the last week of March and the first three weeks of April, a jump in the year-on-year growth rate to around 20% or so in those loan applications. So people were particularly, I think, energized to try and get ahead of the car tariffs that were coming in.
03:56 Speaker A
Any evidence, David, you see in the data so far that would suggest that spending has been impacted at all by the stock market sell-off?
04:13 David
Good question. No, no, no, not really. So you’ve got to remember of course, assets well very skewed in the economy. The top 20% of households by income, they own around 80% of directly held equities. So those outside of retirement accounts. When we look at that data, we look at the higher income cohorts, those people are above sort of top 30% and then into the top 5% right at the top. Their spending growth pretty much bang in line with everyone else is, if anything, a shade more positive. So no sign yet that they’re pulling back. I think those wealth effects as economists call them, come through with kind of quite long and variable lags in essence. We might see that over coming months. We’ll certainly be looking carefully, but right now, not much sign.
