Credit Card Spending In April Declined For the First Time Since February 2021, Says Bank of America Data

In April, total card expenditure per household was down 1.2% year on year, as measured by Bank of America aggregated credit and debit cards. This follows the trend seen in consumer prices. 

The credit card data captured by Bank of America marked the first decline in card spending since February 2021. 

Why It Matters: A reduction in household credit card spending might signal that consumer demand is softening.

In terms of expenditure categories, online shopping and department stores grew the most, while airlines, furniture and lodging were the weakest, indicating that leisure service spending may have peaked. Durable goods spending continued to steadily decline. Bank of America's economists now expect a tepid April retail sales report. 

A Glooming Economic Picture: Growth in retail sales ex-autos would be close to zero, excluding inflation, in April, according to Bank of America. The experts now forecast a positive but weak GDP growth in the second quarter of 2023 and a mild recession thereafter.

Credit Card Stocks Latest Price Action: The performance of stocks tied to credit cards has varied significantly over the past month, with Mastercard Inc. MA rising 6%, American Express Company AXP declining 7%, and Paypal Holdings Inc. PYPL plunging as much as 13%.

Earnings reports for the first quarter were among the key factors contributing to the disparity in performance among credit card stocks lately. 

Check out the following stories published on Benzinga for further details on this: 

• PayPal Holdings Q1 Earnings Highlights: Revenue And EPS Beat, Guidance Raise And More
• Discover Financials Q1 Triumph: Revenue Surges, 26% NII Growth, $2.7B Share Buyback, And 17% Dividend Hike
• Mastercard Q1 Earnings Exceed Expectations On Strong Key Metrics
• Visa Q2 Earnings Highlights: Revenue And EPS Beat, Processed Transactions Up 12% YoY And More
• American Express Q1 Earnings: EPS Miss, Raises Provision of Credit Losses, Reiterates Guidance

Chart: 1-Month Performance of Major Credit Card Stocks

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