LIVE MARKETS-Consumers still spending in April - BofA Institute

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CONSUMERS STILL SPENDING IN APRIL - BOFA INSTITUTE

While the on-again, off-again tariff implementations have rattled the stock market since being announced in early April, consumers have continued to spend, according to the Bank of America Institute.

According to aggregated debit and credit card data, consumer spending growth "showed positive momentum" through the end of March, up 1.1% year-over-year and a 1.8% seasonally adjusted annualized rate.

And that spending has continued into April, according to BofA, with card data through April 19 showing total card spending up 3.1% year-over-year, with a partial boost coming from the later Easter holiday.

But the impact of tariffs is also evident, according to BofA, with spending on "durables" such as furniture and electronics where consumers think prices will rise due to levies being pulled forward into March and continuing into April, although the recent week of April 12 to April 19 "suggests some leveling off" in the year-over-year rate of growth may now be occurring. However, that may also have been impacted by the Easter holiday timing.

As for the stock market sell-off impacting spending, BofA said that it sees little evidence that higher income households, which are more likely to own equities, are adjusting their spending more than others.

BofA said the lack of impact is not surprising as wealth effects only impact consumer spending gradually and only if there is a prolonged market sell-off.

Still, BofA cautions that the eventual end of current spending support from buying ahead, combined with falls in consumer confidence and the stock market, "necessitate keeping a careful eye on how the consumer is faring."

(Chuck Mikolajczak)

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