In a recent interview with NBC’s “Business in America” series, Bank of America CEO Brian Moynihan said that the resilience of American consumers amid high inflation is evident in pet food sales. He stated that internal data compiled by Bank of America shows that, based on credit and debit card spending records, spending on high-end pet food is now lower than that on slightly lower-end brands.
Monihan pointed out that people will adjust their shopping habits due to the increased price of gasoline, “which is the daily reality for ordinary consumers.” He stated that despite the overwhelming advertising campaigns launched by high-end pet food brands, they were unable to reverse the trend of consumers switching to cheaper options.
The report points out that in May of this year, the inflation rate exceeded wage growth for the second consecutive month, and consumers paid about 40% more for gasoline at gas stations than before the US-Iran war. In an interview, Monihan said that the “downgrading of consumption” among Americans is only part of the current consumption trend. The total amount of credit card and debit card spending in May increased by 5% compared with the same period last year, and the spending items far exceeded the scope of necessities.
In other words, consumers are still spending money on vacations. “This is good news for the United States.” He said, “Americans will still go to restaurants, which is fine too; these are all activities that help create jobs.” However, he said the U.S. economy is currently facing a “vibes” problem, which means that Americans are generally pessimistic about their personal finances and the overall economy, but have not stopped spending money.
He said, “We are observing what consumers do, not what they say. People are still consuming and engaging in various activities.” He pointed out: “The public is expressing anger and concern about high prices and affordability.”
Monihan stated that this is something to watch closely, as the U.S. economy will face real trouble if the situation evolves from “complaining but still consuming” to “no longer consuming.” Monihan urged business leaders across the United States to continue hiring. He said that businesses have a responsibility to hire employees, provide them with good compensation and training, and prepare them for the arrival of artificial intelligence (AI), enabling them to use AI in new ways, not to let AI replace employees.
In 2005, Bank of America raised its minimum hourly wage to at least $25, thus increasing the starting salary for new employees to over $50,000 per year.