Bank of America and PNC Report Narrowing Wage and Spending Gaps in June

Bank of America Institute and PNC reported in June that wage growth among lower-income households accelerated while the spending gap between income groups narrowed to its smallest margin in three years. BofA Institute, using anonymized customer deposit data, found lower-income households saw 4.1% after-tax wage growth in June, up from 2.9% in May, compared with 3.4% for middle-income and 4.2% for higher-income households. The convergence follows stronger hiring and job-switching activity among lower-income workers, though BofA cautioned that tax withholding adjustments under the One Big, Beautiful Bill Act may have mechanically inflated the acceleration.

Bank of America Reports June Wage Growth by Income Bracket

Bank of America Institute estimated that lower-income households experienced 4.1% after-tax wage growth in June, an increase from 2.9% in May. Middle-income households recorded 3.4% growth, while higher-income households saw 4.2%. The Institute stated this represented the narrowest divide between low-income and higher-earning workers in years, based on anonymized customer deposit account data.

PNC Identifies Three-Year Low in Spending Gap Between Income Groups

PNC, analyzing its own customer data, reported the spending gap between lower- and higher-income households reached its smallest level in three years. The firm's senior economist previewed June data on X, noting the gap excluding gasoline spending narrowed further last month.

Institutions Attribute Convergence to Labor Market Dynamics

Bank of America attributed the wage convergence to stronger hiring and increased job-switching among lower-income workers. PNC stated that healthier labor market fundamentals are increasingly supporting consumer spending. BofA cautioned that part of the acceleration may be mechanical rather than economic, if lower- and middle-income workers adjusted their tax withholdings to reflect changes under the One Big, Beautiful Bill Act.

Wealth Inequality Persists Despite Wage Convergence

Bank of America noted that stocks, home equity, and other gains continue to accrue overwhelmingly to affluent households. Lower-income workers have not experienced a similar increase in wealth from housing or stock market gains.

FAQ

What wage growth did lower-income households see in June according to Bank of America? Bank of America Institute reported lower-income households saw 4.1% after-tax wage growth in June, up from 2.9% in May.

Why did PNC say the spending gap between income groups narrowed? PNC attributed the narrowing to healthier labor market fundamentals increasingly underpinning consumer spending, with the gap reaching its smallest level in three years.