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BofA CEO Bullish On Consumer Spending

Bank of America CEO Brian Moynihan said the U.S. economy is on better footing than earlier in the pandemic, but more stimulus aid will be needed, Bloomberg reported.

Consumer spending is on the rise, improving 9 percent so far this year, Moynihan said, per Bloomberg. And the stimulus checks sent out in late December for $600 have helped consumers boost their savings.

“People are spending money, people are engaging in the economy differently,” Moynihan said, according to Bloomberg.

But while there’s some sign of client demand, Moynihan said the fight isn’t over yet. He said there is still a need for more stimulus, citing the millions of workers unemployed in fields such as travel, leisure, entertainment and more. He said state and local governments also need more help to fix the issues in their budgets, Bloomberg reported.

Moynihan added that it is premature to spend time worrying about the possibility of inflation by the government spending on financial aid programs. He said if things don’t get back on track, “the rest of the world’s in trouble,” Bloomberg reported.

In addition, the January Consumer Confidence Index found that the current index is at 89.3, up from 87.1 in December. But it also found that the Present Situation Index, which is based on how consumers think current conditions for the business and labor market are going, decreased from 87.2 to 84.4. The Expectations Index, which comes from how the short-term outlook is going for the economy, went up from 87 to 92.5.

“Consumers’ appraisal of present-day conditions weakened further in January, with COVID-19 still the major suppressor,” said Lynn Franco, senior director of Economic Indicators at The Conference Board, in a statement. “Consumers’ expectations for the economy and jobs, however, advanced further, suggesting that consumers foresee conditions improving in the not-too-distant future.”

A PYMNTS report earlier this month found that the pandemic has shifted consumerism. Many consumers have become accustomed to eCommerce and delivery and other digital models, not necessarily wanting to go back to how things were pre-pandemic.

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