Bank of America Chairman and CEO Brian Moynihan is warning that while American consumers continue to prop up the economy through steady spending, signs of strain are beginning to appear—particularly among middle-income households. Speaking on Mornings with Maria on Tuesday, Moynihan said that although the economy remains resilient, the effects of inflation and the ongoing government shutdown could soon weigh heavily on growth.
“You’re still seeing growth among median income households, at up to … 75,000, 100,000. They’re still growing, but they’re growing at a slower rate than the higher-income households above that,” Moynihan explained, citing internal Bank of America research. “So that shows you some of the pinch.”
Despite high prices, consumer spending remains steady. “Inflation’s still high and prices still are on people’s minds, but they continue to spend,” Moynihan noted. “What’s incongruous is when you really look at what people do, they’re actually spending the money. But there is a differential. And so this is where you’ve got to be careful. From a human being standpoint … that’s an issue for American society from the average consumer spending.”
The latest inflation report from the Bureau of Labor Statistics supports his concerns. The consumer price index (CPI), which tracks the cost of goods such as gasoline, groceries, and rent, rose 0.3 percent in September and 3 percent year over year—the highest level since January.
High inflation continues to pressure household budgets, forcing many Americans to spend more on everyday necessities. Families with lower and middle incomes are particularly vulnerable, as they devote a larger share of their income to essentials like housing and food, leaving less room to save or absorb price hikes.
Moynihan emphasized that the American consumer remains one of the most powerful economic forces in the world. “The U.S. consumer is one of the most powerful engines on Earth,” he said. “In October, spending has grown about 5 to 5.5 percent, with consumers putting money into the economy through credit cards, debit cards, checks, and cash withdrawals. That’s actually growing at a slightly higher rate this month. So the consumer continues to spend.”
However, Moynihan warned that the current government shutdown and ongoing trade disputes could change that outlook. “The big worry is, will that all hold as the shutdown and tariffs continue on? That’s the question on everybody’s mind,” he said.
He concluded with a plea for resolution, warning that prolonged government gridlock could stall economic activity. “The need to get approvals from the government slows down,” Moynihan said. “As it goes on longer, it affects more parts of the economy … I hope they resolve it.”