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Bank of America’s Moynihan sees consumer strength pushing off recession

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Bank of America Corp. is currently projecting a potential U.S. recession later than it had expected a few months ago as the U.S. consumer continues to drive positive economic activity, CEO Brian Moynihan told Barron’s in an interview.

Moynihan said the bank’s
research group now sees a mild recession starting as early as the second or third fourth quarter of 2023 and a return to positive growth in the second quarter of 2024.

During the third quarter of 2022, economic forecasters at the bank were predicting that a recession would begin as early as the fourth quarter of 2022 and end in mid-2023.

Moynihan said the recession call from Bank of America at the time was more bearish on the economy than many other predictions by blue-chip companies.

But now the expectation for a recession has moved out further, largely because the U.S. consumer “has kept spending up and kept economic activity up and that’s pushed it out,” Moynihan said.

“The consumer drives a lot of the consumption,” Moynihan said in the interview with Barron’s. “Businesses are there to meet that demand.”

During the fourth quarter, Bank of America continued hiring, while Wells Fargo & Co .
and Goldman Sachs Group Inc.
cut jobs.

Bank of America’s stock has gained 7% so far in 2023, compared with a 7.4% increase by the S&P 500

Also read: Jobs added at Morgan Stanley, Bank of America, Citi and JPMorgan but cut at Wells Fargo and Goldman


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