In the week following the unprecedented Texas cold blast which literally froze spending both the plains states and, to a lesser extent, across the US...
... the latest BofA aggregated credit and debit card data showed that, as expected, total card spending rebounded to 3.5% yoy for the 7 days ending February 27th as the deep freeze lifted.
Some observations from the bank's economists:
Winter blizzard recovery: Combined total card spending in TX, LA, OK, MS, AR, and TN jumped to +6.5% yoy for this 7-day period from -25% yoy the prior week (Exhibit 13).
Low income slowdown: Total card spending for the low income cohort has slowed, owing to a delay in tax refunds. As shown in the chart below, tax refunds are running about 2 weeks behind last year.
Naturally, this impairs the yoy growth rate in spending, particularly for the lower income population. However, BofA expects spending to be boosted in mid-March when tax refunds accelerate, especially if it overlaps with the next fiscal stimulus, at which point we may see a supernova in spending.
But perhaps the most interesting data point in the latest weekly spending report from BofA was the bank's focus on spending trends amongst older Americans, or as BofA calls them "traditionalists" which are aged 73 –92, who are most likely to have received the COVID vaccine.
In particular, spending on airfare surged for traditionalists as compared to other generations – this can be seen in the chart below which shows the indexed level of average spending by cohort to June 2020; traditionalists - i.e., vaccinated Americans' - spending is now 4X the level in June.
As an aside, BofA did not see the same spending surge for lodging which may suggest that traditionalists are traveling to see family rather than take vacations.
Finally, spending at restaurants and bars increased modestly for this cohort recently relative to other age cohorts but there was little difference in brick & mortar retail spend.