Lower-income household drove spending growth in July, says BofA's Liz Everett Krisberg

• Total card spending per household rose 5% in July, marking the third highest growth in over four years.
• Lower-income households are now driving spending growth, particularly in discretionary services like restaurants, supported by +5.2% YOY wage gains (highest since March 2023).
• Consumers are adapting to economic conditions, with the ratio of necessity spending (gas, groceries) to income coming down, and an increase in households paying off credit card balances in full across all income groups.

Consumer spending in July cooled slightly but remains strong, driven by discretionary services and robust wage gains for lower-income households. The 'K-shaped recovery' is converging, with consumers adapting to economic conditions by managing necessity spending and paying off credit card balances, indicating solid financial health despite cost pressures.