bank of america Chief Executive Officer Brian Moynihan said Wednesday that the bank’s data shows consumer spending and credit remain healthy despite rising gas prices.
“Consumers spent about 4% more in August than they did last August,” Moynihan said on CNBC’s “Mad Money.” “Last quarter it was 5%, so it’s on track. This is consistent with strong economic growth.”
His comments came as energy prices rose from August to September amid heightened tensions between the United States and Iran. brent crude oil It will top $100 a barrel on Wednesday. This soaring price has raised concerns that soaring gasoline prices could put pressure on household budgets and put pressure on personal consumption.
Investors often look to big bank executives like Mr. Moynihan to get a near real-time read on the state of the economy. Bank of America’s millions of customers provide insights into spending, wages and credit trends that can complement official government economic reports.
Moynihan said there is little cause for concern for banks so far. “Everything we see is fine,” he said.
Moynihan also said that “credit statistics are as good as they have been in recent years.” He dismissed concerns about the record increase in credit card balances, arguing that the increase was not that alarming compared to overall economic growth.
“We hear about record credit card balances, but the economy is expanding by 40%,” he said. “So we’re seeing a recovery back to trend.”
He noted that businesses are holding up as well. Moynihan said businesses continue to borrow, invest and access credit lines. He added that rising interest rates are increasing the cost of borrowing, especially for small and medium-sized enterprises that rely on short-term credit facilities.
“That’s a big place” where rising interest rates are having an impact, Moynihan said. Still, “they’re borrowing money. They’re using the lines. Their credit quality is good.”
