Consumer Spending Growing at Slower Pace- Bank of America

The Bank of America Institute published a report earlier in November indicating that discretionary consumer spending per household increased in October, rising 2.9% year on year (YoY) but falling from 3.2% in September.

Overall, spending on services appears to be improving. On a year-over-year basis, services spending, which includes restaurants and travel, remained well in the positive territory in October, though airline and lodging spending moderated sharply.

Middle- and upper-income households have surpassed lower-income households as the primary drivers of discretionary spending growth. Lower-income households contributed only one-fifth of the increase in discretionary spending in October, compared to roughly two-fifths in October 2021.

Total card spending per household increased 3.1% year on year in October, down from 4.4% year on year in September, and remained below inflation.

The slowing housing market contributed to lower goods spending, with furniture spending falling by more than 10% year on year.

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