Bank of America CEO gives update on consumer spending

Americans are starting to spend a little of their stimulus money

Bank of America CEO gives update on consumer spending

Consumer spending is growing at a faster rate than expected, as Americans start to spend a little of their stimulus money, Bank of America CEO Brian Moynihan told CNBC on Monday.

“People got a lot of stimulus money, and they’ve been spending it,” Moynihan said during a Squawk Box interview. “The unemployment rate is coming down, and people are going back to work. People can go to amusement parks, they can go on an inside-the-US trip, they can go out to eat. You’re seeing everything open.”

Moynihan pointed out that the volume of transactions made over the Zelle payment network has surged by 20% on a year-to-date basis. Moreover, almost all spending categories have rebounded from pre-pandemic levels, except travel, which is still about 15% lower than in 2019.

As of May, 164 million Americans had received a new set of $1,400 stimulus payments, totaling approximately $386 billion in total. Moynihan noted that stimulus checks had boosted consumers’ checking accounts. Those with around $1,000 to $2,000 in average balances have increased by six to seven times compared to pre-pandemic, while accounts in the level of $2,000 to $5,000 are up three times.

Read more: What does $1.9 trillion in stimulus mean for housing, mortgage?

“We’re starting to see them spend a little of that money. They spend about 30% to 35% of the last two stimulus – the $600 and $1,400,” Moynihan said. “The amazing thing is, as opposed to hoarding last year at this time and buying stuff because you had to get stuff because you’re stuck in your home, it’s now slightly moving out to really spending the money in any way you want, except for international travels.”

Moynihan also discussed during the interview how BoA had increased its cybersecurity spending in light of several recent, high-profile attacks. The bank now invests $1 billion more on cybersecurity per year, compared to around $300 million a year when he took the reins as CEO.