Bank of America Calls Spending Trend the 'Great Convergence'

Bank of America is calling the trend the "great convergence, with data showing spending and wage growth among its customers has converged across income groups since May. Spending growth among lower-income households hit 5.4% year over year, slightly exceeding the 4.9% rate among middle-income households. Lower-income Americans are also seeing stronger pay gains: After-tax wages rose 5.2% in July from the same period a year ago, surpassing the wage growth rate for higher-income households for the first time since December 2024. PNC said Monday that the gap between spending growth among its richest and poorest account holders shrank to just 0.1 percentage point in July, from a peak of 5 percentage points last year.

The bank attributes the shrinking gap largely to an improving labor market, with more lower-income households working and collecting paychecks. "From our perspective, through all the various dimensions, there's not like that much there in terms of support for the K-shape narrative, JP Morgan Chase chief financial officer Jeremy Barnum told investors last month. The White House is seizing on the shift.