Bank of America customers are spending more across all accounts than they did last year, but more stimulus is needed to support small businesses and people who are unemployed, according to CEO Brian Moynihan.
“When you look at what they’re spending year-to-date, they’ve spent more in 2020 than they did in 2019, and that is now across $2.7 trillion in money moved by our consumers,” Moynihan told CNBC.
Regardless of brisk spending, Moynihan also said that more stimulus funds are necessary to help people who are out of work and support small business survival. Negotiations on Capitol Hill have yet to result in a new package.
Despite a record number of new coronavirus cases across the country and an escalating death toll, people are also saving more and shopping with debit cards instead of credit. Further, banks have not had to use the billions set aside for anticipated loan defaults.
“Way back in May, you could see it flattening out and starting to grow,” Moynahan said. “Now it’s really grown every month since then. The month of November was up about 4 percent over the last November, and the month of December so far is up double digits.”
Brisk December spending was propelled by curtailed holiday shopping in November due to new indoor shopping and dining restrictions, he added.
The financial situation for households and businesses has been helped in part by government stimulus money provided via direct funds, pandemic unemployment, and Paycheck Protection Program (PPP) loans.
BoA said in October that consumer spending was up about 10 percent and loan delinquencies were dropping.
The country’s second-largest bank reported third quarter net income of $4.9 billion, down from $5.8 billion last year, but up from $3.5 billion in the second quarter.