The CEO of Bank of America says Americans are struggling and debating whether the U.S. economy is technically in a recession or not is missing the point.
The current state of the economy is having a negative effect on people who can least afford it. Brian Moynihan said the Biden Administration's attempts to argue that the U.S. was not technically in a recession was not helpful.
"Recession is a word. Whether we are in a recession or not is really not the important thing. It’s what it feels like for the people going through this," Moynihan told The Associated Press in an interview.
The BofA CEO would not say the U.S. economy is in recession, saying that declaration will have to come from the National Bureau of Economic Research, the nonpartisan organization that determines when recessions begin and end.
Earlier this week, Michael Gapen, the head of U.S. economics at Bank of America, told FOX Business that he expects the Federal Reserve to inadvertently trigger a downturn this year with its war on inflation.
"This cycle probably ends in a mild downturn," Gapen said. "How do I come to that? It's basically just history. It's really hard to achieve a soft landing."
Soaring inflation and falling consumer confidence have been negative factors, but on the plus side the monthly jobs report is still strong.
U.S. employers unexpectedly added 528,000 jobs in July. Wage growth also accelerated, surging by 0.5% in the one-month period from June.
Moynihan cited gas prices and rent as two major issues negatively impacting average Americans. He said they are reasons to be concerned.
The national average for a gallon of gasoline soared to just over $5 in June before falling back below $4 last week.
Moynihan told the AP that rents are a bigger concern.
"Gas prices are coming back down, but rents are going up 10, 12, 15%. And rent can end up taking 40% of these households' income," Moynihan said.
|BAC||BANK OF AMERICA CORP.||25.93||-0.76||-2.85%|
Moynihan still believes that the American consumer is still in good shape and able to withstand the economic turbulence.
Moynihan said companies are still raising wages as well, which is helping Americans cope.
The Associated Press contributed to this report.