NEW YORK — Americans continue to spend on travel, dining and other discretionary purchases despite rising inflation and higher gasoline prices, even as many remain concerned about affordability and the broader economy, according to Bank of America CEO Brian Moynihan, who called on his fellow CEOs to continue hiring.
In an interview with NBC News, Moynihan said spending data from the bank’s nearly 70 million customers show consumers are adjusting their purchasing habits to cope with higher costs rather than pulling back significantly on spending.
One example can be found in the pet food aisle.
“You know, higher end pet food is not being charged as much on our credit and debit cards as the next brand down,” Moynihan told NBC News, citing aggregated internal bank data. He said consumers appear to be trading down to less expensive products to offset rising costs elsewhere, including gasoline.
“What you’re seeing is people are shifting, so people shift around and make room for the higher gas prices,” Moynihan said. “That’s the reality of the day-to-day consumer.”
Inflation Outpaces Wage Growth
The comments come as inflation outpaced wage growth in May for the second consecutive month and consumers faced gasoline prices roughly 40% higher than before the United States entered the conflict with Iran, according to NBC News.
Despite those pressures, Bank of America’s data showed spending on the bank’s credit and debit cards increased 5% in May from a year earlier.
Moynihan told NBC News that spending remains broad-based and extends beyond necessities.
Consumers “are still spending on vacations and things like that, which is good for America. They still go out to eat, which is also good. Those are job-creating activities,” he said.
Consumers Concerned, But Still Spending
Moynihan acknowledged what he described as a disconnect between consumer sentiment and consumer behavior.
While surveys consistently show Americans are worried about inflation, affordability and the economy, spending patterns have remained relatively resilient.
“We watch what they do, not what they say,” Moynihan told NBC News. “They’re spending money and doing things.”
At the same time, he cautioned that persistent concerns over affordability bear watching.
“What they’re saying is they’re very upset and they’re worried about high prices, affordability,” Moynihan said. “We have to watch that, because if it goes from ‘what they say versus what they do’ to what they’re doing, that’s a real problem for the U.S. economy.”
Consumer spending accounts for the largest share of U.S. economic activity and remains a key driver of gross domestic product growth.
Balancing Today’s Bills With Tomorrow’s Investments
Moynihan also discussed the financial challenges many families face as they attempt to manage current expenses while investing in education and other long-term goals.
Drawing on his own family’s experience, Moynihan told NBC News that his parents raised eight children and helped send all of them to college, often relying on loans and personal sacrifices to bridge funding gaps.
For many families today, he said, the challenge remains finding the right balance between meeting current obligations and preparing for the future.
“That’s the question, invest in the future but also make sure that you’re always trying to figure out how you can make a balance in the household,” Moynihan said.
He added that broader economic policy should focus on ensuring Americans can achieve a high standard of living.
Calls on CEOs to Continue Hiring
Moynihan also used the interview to urge corporate leaders to continue hiring and investing in workers as artificial intelligence transforms the economy.
“Our job, a corporation’s job, is to hire people, pay them well, train them well, get them ready for this brave new thing called AI,” he told NBC News.
Rather than viewing AI primarily as a replacement for workers, Moynihan said companies should focus on retraining and reskilling employees to work alongside emerging technologies.
“Apply AI, because you need to do that for the shareholder, and make sure you’re making money,” he said. “But do it in a way that you’re making sure that you’re reskilling your people, retraining your people.”
Nearly 2,000 Hired
Bank of America recently hired approximately 2,000 college graduates and 2,000 summer interns and has committed to hiring 10,000 military veterans and 8,000 community college recruits over the next five years, according to NBC News.
Moynihan said the bank’s workforce of roughly 210,000 employees requires hiring between 1,300 and 1,500 people each month to replace workers who retire or move on to other opportunities.
He said the company carefully manages workforce attrition while redeploying and retraining employees as business needs evolve.
“Affordability is very tough on people, but we have to do our part to make sure our teammates can live well,” Moynihan told NBC News.
Last year, Bank of America increased its minimum wage to $25 per hour, raising its annual starting salary to more than $50,000.
