Bank of America CEO says the consumer remains resilient despite rising gas prices
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Bank of America CEO Brian Moynihan said on Wednesday the bank's data shows consumer spending and credit remain healthy despite rising gasoline prices.
"Consumers spent in the month of August about 4% more than they spent last August," Moynihan said on CNBC's " Mad Money ." "Last quarter it was 5%, so it's kicking along. That's consistent with a strong growing economy."
His comments come as energy prices climbed through August and into September amid escalating tensions between the U.S. and Iran, with Brent crude topping $100 per barrel Wednesday. The surge has raised concerns that higher gasoline prices could squeeze household budgets and weigh on consumer spending .
Investors often look to major bank executives like Moynihan for a near real-time read on the economy. Bank of America's millions of customers give it insight into spending, wages and credit trends that can complement official government economic reports.
So far, Moynihan said the bank is seeing little cause for concern. "Everything we see is fine," he said.
Moynihan also said "credit statistics are as good as they've been for years." He pushed back against concerns about record credit-card balances, arguing that the increase looks less alarming when compared with the growth of the overall economy.
"You hear about record outstanding balances of credit cards, but the economy is 40% bigger," he said. "So what you see is a recovery back to trend."
He noted that businesses are holding up as well. Moynihan said companies continue to borrow, invest and use their credit lines. He added that higher interest rates have made borrowing more expensive, particularly for small and midsize businesses that rely on short-term credit lines.
"That's the big place" where higher rates are having an impact, Moynihan said. Still, "they're borrowing. They're using the lines. The credit quality is good."
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