American consumers are spending less money — and the wealthy are leading the way, according to Bank of America Institute. Overall, the bank's credit card spending per household dropped 1.2% in April compared to 12 months ago, the first negative year-over-year reading since February 2021. Of note, higher-income households' discretionary spending was lower than that of lower- and middle-income households — and they spent less in April than compared with a year ago.
"Pressures on the consumer remain, including moderating wage growth, SNAP reductions, and still elevated inflation," Deutsche Bank analyst Krisztina Katai wrote. "Additionally, our recent management conversations point to consumers prioritizing necessities." In this environment, Katai continues to remain defensive. Walmart , Costco and Dollar Tree are among those "well positioned to take advantage of value seeking consumers and need-based purchases," she said.