Bank of America Institute Research Hub

The Bank of America Institute report reveals a significant divergence in consumer spending patterns that challenges the narrative of broad-based economic resilience. While total spending grew 4.8% year-over-year in April, real growth is effectively constrained to just 1% after accounting for 3.8% CPI inflation. This economic performance is bifurcated along income lines, with high-income households experiencing 6.0% wage growth that easily absorbs inflationary pressures. Conversely, lower-income households face stagnation with only 1.5% wage gains, leaving them with limited capacity to manage rising costs. These dynamics indicate that aggregate economic data is currently being buoyed by the top income tercile, while lower-income consumers are increasingly forced to reduce discretionary expenditures. Consequently, the Institute highlights that headline growth figures mask a more fragile underlying reality for a substantial portion of the population.