Regional Roundup: Shifts in spending
The desk asserts a broad divergence in consumer spending trends across U.S. regions, with the Northeast leading in growth metrics, highlighting a shift towards essentials while discretionary spending prevails in the West and South. Per the full note from Bank of America, the Northeast has now surpassed the West, driven by notable upticks in necessities such as groceries and utilities, reflecting the nuanced recovery paths post-pandemic. The impact of these regional shifts could influence currency valuations and risk sentiment as traders position ahead of macroeconomic indicators.
What the desk is arguing
The desk highlights a significant divergence in consumer behavior that may affect regional economic resilience and subsequently impact financial markets. Per the full note from Bank of America, the Northeast saw stronger growth in consumer spending compared to the West, primarily fueled by necessities such as groceries and utilities.
This divergence is critical as it indicates differing economic pressures—higher costs of living in the Northeast versus more discretionary spending in the South and West. Tracking such patterns can provide insight regarding future regional economic health, potentially impacting currency movements and trader sentiment.
Where it sits in our coverage
The current consensus target for the EUR/USD is 1.075, with a range that spans from 1.04 to 1.12. Firms with notable targets include: - jpmorgan: 1.10, Mar26 - bofa: 1.04, Mar26
This desk's outlook on spending dynamics aligns with jpmorgan, suggesting continued strength in economic sectors, while it contrasts with bofa's more cautious stance reflecting pressure from essential goods costs.
How other firms see it
Several firms, including jpmorgan and goldmansachs, are aligned in their positive outlook towards consumer resilience amid economic recovery. In contrast, bofa remains wary, focusing on potential risks stemming from varying spending patterns.
Key areas to monitor include the trajectory of USD/JPY, which may respond to shifts in regional consumer sentiment and spending habits that reflect broader economic conditions.
What the calendar says
No high-impact events are currently on the horizon that would immediately impact these insights, leaving the narrative open to interpretation based on consumer trends and economic indicators.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01The Northeast surpasses the West in consumer spending growth driven by necessities.
- 02Discretionary spending remains strong in the West and South, indicating regional disparities.
- 03Current consumer trends could influence currency valuations as traders position accordingly.
- 04Understanding these shifts will be critical for forecasting economic conditions in the coming months.
Market implications
Watch for shifts in consumer spending data as it could influence the positioning in currency pairs, especially if the trend towards necessity spending continues to strengthen. A notable level to observe is the 1.075 mark for EUR/USD, which may respond to these regional economic dynamics.
Risks to this view
Should consumer spending patterns shift unexpectedly, perhaps due to rising inflation or policy changes from the Federal Reserve, the current outlook may be invalidated. A decline in spending in the Northeast or a rebound in discretionary spending in other regions could also signal a reversal in the prevailing trend.
~~~~~~~~~~~~~~~ Bank of America ~~~~~~~~~~~~~~~ Regional Roundup: Shifts in spending Consumers generally remain resilient, but regional labor market and spending patterns are far from uniform. The Northeast overtook the West as the fastest-growing region for consumer spending in June, largely because of strong spending growth for groceries, gasoline and utilities. By contrast, discretionary spending growth outpaced necessity spending in the West and South, highlighting regional differences in how consumers are allocating their budgets.
Click below to access our latest publication for a more in-depth look at these insights. You are receiving this email as a subscriber to Bank of America Institute analyses on the economy. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Read the publications, available through the link(s) above, for complete information including important disclosures. Please visit our Bank of America Institute webpage for a compilation of prior publications.
This message and any attachments, is for the intended recipient(s) only, may contain information that is privileged, confidential and/or proprietary and subject to important terms and conditions available at If you are not the intended recipient, please delete this message. UNSUBSCRIBE now to stop receiving Institute Insights emails from Bank of America Institute. Please do not reply to this email, as email replies are not monitored.
Contact Us Privacy Security 100 N Tryon St, Charlotte, NC, 28255-0001 (C)2026 Bank of America Corporation. All rights reserved. This email was sent to: MAP6207679
Sources & References
How we cover this story