BofA CEO: Consumers spending at fastest pace he's seen

NEW YORK (AP) — The head of the nation’s second-largest bank said consumers are spending “at a faster rate” than he’s ever seen but he remains concerned about how inflation and supply-chain issues will influence the economy going into the winter.

In an interview this month with The Associated Press, Bank of America Chairman and CEO Brian Moynihan said spending on the bank's debit and credit cards has surged as the economy recovered from recession.

But Moynihan also said a recent decline in consumer sentiment — by one measure to the lowest point in a decade — may indicate higher costs are adding to Americans’ frustration with the ongoing pandemic.

“(The consumer) is earning more money, but now they are worried that these costs are going to go up faster than their wages,” he said. “Also, frankly, the constant ebb and flow of this virus weighs on people’s minds over time.”

On Friday, the government said prices for U.S. consumers jumped 6.8% in November compared with a year earlier as surging costs for food, energy, housing and other items left Americans enduring their highest annual inflation rate in 39 years.

For now, consumer spending is holding up, which gives Moynihan confidence in the economy. In addition, unemployment is at post-pandemic lows, wages are rising and GDP growth is expected to top 5% this quarter.

Moynihan took over Bank of America in 2010, at a time when the bank was posting billions of dollars in losses from bad bets on the housing market as well as its ill-timed purchase of Merrill Lynch. He’s been largely credited with cleaning up the banking giant’s troubles and returning it to record profitability and fewer losses.

More recently, Moynihan has had to navigate the bank through a second far-reaching crisis: the coronavirus pandemic. The bank had to...