US Card Spending Rises Most Since Early 2024, BofA Data Show

US credit and debit-card spending, based on Bank of America Institute data, rose 2.4% year-over-year in October, marking the largest annual increase since early 2024, and a 0.3% gain from September, representing the fifth consecutive monthly rise. This sustained growth is attributed to strong demand from higher-income households and ongoing price increases, signaling continued consumer resilience.

Analysis

US credit and debit-card spending demonstrated robust growth in October, climbing 2.4% year-over-year, the highest annual increase since early 2024. This data, based on Bank of America Institute's aggregated card transactions, also revealed a 0.3% month-over-month rise, marking the fifth consecutive monthly gain.

The sustained spending momentum is attributed to strong demand from higher-income households and persistent price increases. This suggests continued consumer resilience, particularly among affluent demographics, underpinning a moderately positive outlook for consumer-driven sectors.

While the optimistic tone highlights economic strength, the role of price increases in boosting nominal spending warrants closer examination. Investors should consider that a portion of this growth reflects inflation rather than purely increased consumption volumes, indicating persistent inflationary pressures.

Key Decisions for Investors

• Monitor consumer discretionary stocks, especially those catering to higher-income demographics, for potential upside given sustained spending trends.
• Evaluate the real versus nominal growth in retail sales, as persistent price increases indicate inflation remains a significant factor impacting consumer purchasing power.
• Watch for upcoming inflation data and central bank commentary, as continued strong spending combined with price increases could influence monetary policy decisions.