Big Banks: Consumers Keep Spending Despite Tariff Worries

While Americans are worried about the economy, it hasn’t kept them from spending.

As The Wall Street Journal (WSJ) reported Tuesday (April 15), Bank of America’s latest earnings report showed consumer spending increasing when tariff worries first appeared. This followed last week’s JPMorgan Chase earnings, which also showed upticks in credit card and debit card spending.

Bank executives also noted that spending has remained consistent since the quarter ended, even after President Donald Trump’s “Liberation Day” brought substantial new tariffs. JPMorgan argues that some of that might have been people making purchases to escape tariff-related price increases.

“This is consumers continuing to spend, and that is ultimately the basis of the U.S. economy,” said Alastair Borthwick, Bank of America’s chief financial officer, on a call with reporters. “The signals at this point from the consumer are that the U.S. economy still remains in good shape.”

Recession concerns and fears of high prices have ramped up this month when the new tariffs triggered market upheaval. Consumer sentiment has fallen to lows not seen since the Great Recession, and executives on Wall Street are warning that the White House’s tariff campaign could bring forth an economic downturn.

According to the report, banks are seeing stronger indications of reduced spending among their corporate clients.

“Everyone is prepping for more headwinds,” Mark Mason, Citigroup’s finance chief, told reporters. “Some companies are bolstering already strong balance sheets. Others are accelerating imports to stockpile inventory.”

Bank of America CEO Brian Moynihan noted a similar trend during his firm’s earnings call on Tuesday, saying business clients were worried about tariffs and where they should invest.

“And I think that’s slowing down some of their decision paths right now because they’re trying to figure out ‘for my goods and services, will I be able to pass through the price? Do I need this change my business plans in terms of growth? Should I buy that piece of equipment?’ That’s why line usage has been relatively muted still, and we continue to try to grow it,” he said.

Meanwhile, forthcoming research from PYMNTS Intelligence shows that while consumers may be continuing to spend, they are drawing lines between what they’re willing to spend their money on and what they can skip. Even in essential categories such as groceries, the report found a hierarchy of what consumers think of as “indispensable.”

“While most consumers would try to buy fewer or cheaper groceries and dine out less, only a small percentage would completely eliminate items in those categories. Just 3.4% would stop buying milk (dairy or plant-based),” PYMNTS wrote. “Restaurant dining, on the other hand, is viewed as more discretionary, with 14% willing to cut it out entirely after price increases.”