LIVE MARKETS-Cut the tariff noise; US consumers still spending

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CUT THE TARIFF NOISE; US CONSUMERS STILL SPENDING

While the globe is busy pondering over Trump's on-and-off tariffs and his next move, consumers across most of the United States are still spending, Bank of America Institute said, amid looming fears of higher consumer prices and recession.

U.S. card spending per household for March, rose 1.1% on an annual basis, while seasonally-adjusted card spending gained 0.2% month-on-month(m-o-m), according to Bank of America's aggregated credit and debit card data.

Trump's temporary pause on most of his trade levies has invoked a much needed relief rally across risk assets, after a sell-off spree, even as the trade war against China intensified further.

Delving deeper, U.S. higher-income households continued to dominate spending growth over lower-income ones, helped broadly by after-tax wages and salaries growth.

In terms of regions, March spending continued to grow month-on-month across most regions in U.S., but flattened in the West. Washington, DC-Arlington Alexandria metropolitan statistical area (MSA) saw muted spending growth, as the slowing might also reflect the administration's attempts to reduce the size of the Federal workforce, BofA added.

Faced with the prospect of higher prices, are consumers 'buying ahead' to beat tariff impacts? - Looks like a somewhat yes especially in durable goods, says BofA.

That was evident as durables spending which includes auto parts, furniture, electronics, and building materials, increased 1.5% m-o-m in March after two months of declines.

"One category where buying ahead is clear appears to be vehicles," added BofA as car and truck sales surged in March.

Interestingly, consumer vehicle loan(CVL) applications boomed especially at the end of March following Trump's announcement that tariffs on autos and auto parts will go into effect on April 2.

Testimony to that, CVL applications jumped 23% year-on-year between the period of March 24 - April 1.

On the services front, consumers eased spending on '"nice-to-have" discretionary services in March, while more inflation driven spending on necessities such as insurance, rent and utilities continued to rise, BofA added.

(Siddarth S)

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