Credit card use drops in D.C. — DOGE could be to blame, says Bank of America
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Credit card spending is down in the D.C. area, and DOGE cuts appear to be a factor, Bank of America says.
Why it matters: Job cuts and economic uncertainty are hurting the local economy, the new analysis suggests.
By the numbers: Bank of America found that discretionary spending (think entertainment and dining out, but not gas, groceries and utilities) was down 0.5% in D.C. in February year-over-year.
- Other East Coast cities like Boston, NYC, Philadelphia and Baltimore posted positive growth, suggesting D.C. is an outlier.
- Total card spending also increased in those cities, while D.C. recorded a 0.3% decline.
The intrigue: Bank of America also compared total card spending to November, before winter weather and DOGE cuts started.
- D.C. card spending had grown +0.4% over the previous year during that time.
What they're saying: "DOGE cuts appear to be weighing on spending in D.C.," Bank of America Global Research analysts write in the new report.
- The bank found that spending on restaurants declined, but "necessity spending," such as groceries, didn't appear to be affected.
Zoom out: Total Bank of America card spending was up 0.3% month-over-month in February.
- "Total card spending growth is holding up for now, indicating that the impact of the DOGE cuts has been localized so far," the bank says.
But across the country, "credit spending was soft in many categories, particularly airlines," the bank notes. D.C.'s drop was steeper than the national average.
- Three of the largest U.S. airlines — American, Delta and Southwest — cut revenue or earnings forecasts this week, citing weakening consumer demand.
- It's among several indicators that consumers are losing their nerve amid tariff uncertainty and rising recession fears, Axios' Ben Berkowitz writes.