Bank of America on Consumer Spending Trends and Tariff Impact

Consumer Spending Trends in March

• 📈 Consumer spending in March saw a 1% increase after a drop in February, indicating continued consumer activity.
• 🚗 Data suggests some of this spending, particularly on durables, may have been a pull-forward ahead of anticipated tariffs.
• 💡 While durable spending was up 1.5%, its ratio to total spending declined, presenting a mixed message.

Auto Loan Applications and Tariff Impact

• ⚡ Auto loan applications surged by 23% in the six days following the tariff announcement on March 26th, showing a clear pull-forward in demand.
• 📉 This surge in auto loan applications suggests consumers were trying to beat the tariff deadline by purchasing vehicles.

Wage Growth and Inflationary Pressures

• 📊 Wage growth across all income groups is continuing, but showing signs of pulling back.
• ⚠️ Higher-income wage growth slowed by 100 basis points to 2.6%, while lower-income wage growth dropped to its lowest level in eight years at 1.4%.
• 🏠 Inflation persists in essential services like rent, utilities, and insurance, disproportionately affecting lower-income households.

Consumer Behavior Shifts

• 🛒 Consumers are trading down from premium to value grocers.
• 🍽️ There's a noticeable shift from spending on