According to reports, the U.S. economy continues to expand because consumers keep spending. CEO Brian Moynihan told Barron’s in an interview that Bank of America Corp. is now seeing that the potential recession in the US may occur later than the country had expected just a few months earlier. This is because the U.S. consumer now continues to grow positive economic activity.
Brian Moynihan said the Bank of America Corporation research group sees a small recession starting as early as the 2nd, 3rd, or 4th quarter of 2023 and a return to positive economic advancement in the 2nd quarter of 2024.
Economic research speculations
During the 3rd quarter of the year 2022, economic conditions at the bank were predicted that a recession might begin in the 4th quarter of 2022 and end in the middle of 2023.
Brian Moynihan said that the recession at that time was more bearish on the economy. But, now the expected recession is pushed back significantly because of the U.S. consumer that has kept spending and kept the economic activity running up. He further said that the consumer drives much of the consumption, so businesses are present to meet that growing demand.
During the 4th quarter, Bank of America Corporation continued hiring also. At the same time, Wells Fargo & Co. and Goldman Sachs Group Inc. cut jobs. Bank of America Corporation’s stock gained 7 percent so far in the year 2023, compared with a 7.4 percent increase by the S&P 500.
The Bank of America
The Bank of America Corporation, or BAC, is a multinational investment bank in America. It has its headquarters at the Bank of America Corporate Center in Charlotte, North Carolina. The Bank of America Corporation, or BAC, was started in San Francisco.
The Bank of America Corporation is the 2nd-largest banking institution in the USA, just after JPMorgan Chase, and the 2nd largest bank globally by market capitalization. Bank of America Corporation is one of the Big 4 banking institutions in the USA. It serves about 10.73 percent of all American bank deposits. It is directly competing with Citigroup, JPMorgan Chase, and Wells Fargo. The bank’s primary financial services are wealth management, commercial banking, and investment banking.
What is a recession?
According to economics, a recession happens when there is a common decline in economic activity. Recessions usually occur when there is a huge drop in spending, which is an adverse demand shock. This may happen in several events, like an external trade shock, a financial crisis, the bursting of an economic bubble, an adverse supply shock, or a greater-scale natural disaster, for example, the pandemic.
In the USA, a recession is defined as a decline in economic activity spread across the market. It can last more than a few months. It can be easily seen in wholesale-retail sales, real income, GDP, industrial production, and employment. The European Union adopted an almost similar definition. In the United Kingdom, a recession is usually defined as negative economic growth for two consecutive quarters.