Continuing state jobless claims increase 51,000 to 1.38 million

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Bank of America sees resiliency in consumer spending in face of rising inflation

Bank of America Corp. said consumer spending is showing “signs of resiliency” in the face of rising inflation, as the squeeze of increasing gas prices is being offset by pent-up demand for services such as travel and entertainment. The bank said spending per household during the 28 days prior to June 30 grew 3.3% from a year ago, as the labor market remains supportive and consumer balance sheets “are in good shape.” BofA said credit and debit card spending in June was up 11%. Average gas spending as a share of total card spending per household increased to 9.8% for lower-income households from 7.7% in February. “Consumers are in better shape to respond to a slowdown in the U.S. economy than they have been in many previous business cycles,” said David Tinsley, senior economist for the Bank of America Institute. “But with some slowdown in services spending, we may need to wait until the summer is over to get a clearer picture of the strength of the underlying consumer momentum.” BofA’s stock, which rose 0.7% in premarket trading, has dropped 21.4% over the past three months through Wednesay, while the S&P 500 has lost 14.0%.

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