Overview
Bank of America card-level data show total spending per household was up 4.8% from a year earlier in April, and climbed 0.6% from March on a seasonally adjusted basis. The headline gains mask divergent performance across spending categories during the month.
Category performance
Spending at the pump rose as gasoline prices increased, contributing meaningfully to the overall rise in spending. Online retail purchases remained robust. By contrast, a number of in-person retail categories reversed the advances they recorded in March: department stores, home improvement retailers, airlines and clothing stores all posted declines in April.
Bank forecasts and methodology notes
Bank of America projects month-over-month increases of 0.4% for both retail sales excluding autos and for the control group in April. The control group is defined to exclude autos, gas, building materials and restaurants. These month-over-month projections are noted to be slightly below consensus estimates.
Gas prices and fiscal support
The bank estimates that the recent jump in gasoline prices has effectively reduced consumers' purchasing power by roughly $25 billion. Even so, credit and debit card spending performed relatively well through March and April when gas purchases are excluded. Bank of America attributes much of that resilience to fiscal stimulus from the OBBBA, noting tax refunds were higher by about $50 billion year-over-year.
Outlook and household differences
With Tax Day now behind consumers, the stimulus-related boost is easing. The bank cautions that absent relief in fuel prices, the burden from higher gasoline costs could exert a more pronounced drag on household spending in coming months. The data also show a marked pickup in non-discretionary spending among lower-income households in March and April. When spending is measured excluding gasoline or discretionary purchases, the gap in spending growth between higher-income and lower-income households widens.
Implications
These patterns suggest durable support for purchases that have benefited from fiscal flows, while categories sensitive to travel, apparel and in-store home improvement experienced softness. The interplay between higher fuel costs and waning tax-driven stimulus will be important to monitor for future consumer spending momentum.