America’s consumer economy showed renewed signs of strength in July, but the gains are not being shared equally. According to Bank of America Institute’s latest report, Consumer Checkpoint: Gains and Gaps, higher-income households are enjoying accelerating wage growth and increased spending, while lower-income households face slowing pay gains and flat expenditure—marking the widest such divide in more than four years.
The institute’s research, based on aggregated and anonymized deposit and transaction data, reveals that after-tax wages for the lowest-income tercile grew just 1.3% year over year (YOY) in July, down from 1.6% in June. In contrast, higher-income wage growth accelerated to 3.2% YOY—its third consecutive monthly increase.
