Bank of America says card data shows the spending gap between upper- and lower-income households has narrowed significantly, signaling the K-shaped economy that has persisted since late 2024 may be ending. Wealthier consumers' spending has held steady since March, while poorer households have begun spending more on goods and services excluding gas. The bank cites easing Middle East tensions, which have already pushed oil from over $113 a barrel to $79, and a rise in after-tax wage growth for lower- and middle-income households as potential drivers. Improved job prospects, with unemployment at 4.3% and private employers adding 122,000 jobs in May, along with broader hiring in blue-collar sectors like construction and leisure, could further support the trend.
Bank of America CorpBank of America's card data shows lower-income spending rebounding, which could boost transaction volumes and fee income.