Bank of America Corp. Chief Executive Officer Brian Moynihan said consumer spending has surged amid the reopening, much of it fueled by leftover stimulus money.
“Our consumers have lots of money in their checking accounts,” Moynihan said Sunday on CBS’s “Face the Nation.” “They have not spent about 65% to 75% of the last couple rounds of stimulus.”
Spending by consumers at the second-biggest U.S. bank exceeded $1 trillion so far this year, up 20% over 2019, he said.
Domestic travel spending, such as car rentals and hotels for leisure trips, has increased, and consumers are shifting from buying food in the store to visiting sit-down restaurants, he said.
The U.S. economy is projected to grow 7% this year and 5.5% next year, according to Bank of America’s research team.
Loans are “starting to pick up,” and there’s plenty of borrowing capacity because companies have unused credit lines, Moynihan said. Loan growth has been a challenge across the banking industry because many consumers and businesses are sitting on cash from savings and stimulus during the pandemic.
In the first quarter, Bank of America reported a decline in loans in the consumer banking unit. Moynihan said then that the bank is “highly focused” on capturing loan growth during the economic recovery.
The key risks to economic growth are supply chain and labor shortages, Moynihan said. In a spring survey conducted by the bank, small businesses said their top concerns were getting workers and supplies to match the demand. “That’s something that’s straightening out, but will take a little time,” he said.
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