“‘So the notion that people are spending the stimulus down isn’t happening yet. It may happen but it hasn’t happened yet.’”
That was Bank of America
Chairman & CEO Brian Moynihan claiming that many Americans have not yet spent all their stimulus money.
In a Monday interview with CNBC’s “Squawk Box,” Moynihan said his bank’s customers actually have more money now compared with a year ago, despite increased inflation — Moynihan said bank account balances are higher despite increased spending as well.
“Balances continue to be stable and continue to grow year over year for the broad base of consumers,” Moynihan said. “More importantly, the spending levels in May for the first few weeks are up 10% over last May.”
The Federal Government, through the IRS, sent three economic stimulus payments during the COVID-19 pandemic. The first was for $1,200 in April 2020, the second was for $600 in December 2020/January 2021, and the third was for $1,400 in March 2021. To be eligible to receive the payments, there were income maximums —- roughly $75,000 adjusted gross income for individuals and a range from $100,000 to $160,000 for couples, depending on which round.
The first two payments were executed by the Trump administration, while the third payment was by the Biden administration.
The comments from Moynihan that many Americans still haven’t spent all of their stimulus money is consistent with some surveys and research papers about the subject.
According to a survey from the New York Federal Reserve about the third round of stimulus payments in March 2021, Americans said they planned to use just 25% of the money for spending and save the rest or use it to decrease various forms of debt.
Similarly, “saving” was the largest category of intended use of 2021 stimulus money (34%), according to a 2021 Bloomberg-Morning Consult poll.
The comments come as Bank of America Corp. said it will raise its U.S. minimum wage to $22 an hour from $21 by the end of June. Shares of Bank of America rose 6.5% during Monday morning’s trading. The bank’s stock is down 18.9% since the start of 2022, compared with a 16.67% drop for the S&P 500
over the same period.