Latest news with #TaylorBowley
Yahoo
16-05-2025
- Business
- Yahoo
An unexpected theme is coming out of a turbulent sector: Stability
Stability isn't the word that comes to mind when the subject is US airlines. Yanked guidance, persistent headlines of service disruptions, and airport calamities have forced less-flattering associations with the sector. But a steadiness is nonetheless the theme of the moment (apologies to travelers in Newark) as airlines share signs of booking stability even as trade and travel uncertainty cloud the outlook, alongside safety unease. By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy In a new report Thursday, on Bank of America's Industrials, Transportation & Airlines Conference, airline management teams focused on the sturdiness of booking trends, especially at the three legacy carriers, United (UAL), American (AAL), and Delta (DAL). They also noted the continued resilience in premium travel, with softness mostly in main cabin, reflecting similar comments the companies made during their earnings calls last month. Corporate travel growth is off the peak seen earlier in the year, according to the report, but is still positive. Despite it all. That meshes with accounts outside of the sector that appear to show business-as-usual consumption in some respects but cautious spending elsewhere. More affluent customers continue to shell out, whereas lower earners are pulling back. As Delta Air Lines management noted, the bulk of weakness has come from off-peak bookings in the main cabin. American Airlines and Southwest Airlines (LUV) both pulled their outlooks for 2025 when they reported last month, citing uncertainty that weighed on demand. Delta did the same. But since then, stability has taken hold, according to the report. At the conference, Frontier also noted that passenger demand has strengthened as consumer confidence improved, allowing the company to raise fares. Another report on Thursday by the Bank of America Institute showed further signs of spending weakness, as well as bifurcation. "Travel and tourism spending has gotten off to a slower start in 2025 than in the past few years," according to the report, which measured household card spending from the start of the year through the beginning of May. The data showed spending on airlines and lodging was notably weaker. One potential reason behind softer travel spending, economists Taylor Bowley and David Tinsley said, is the sharp drop in consumer sentiment this year — a key theme that has rattled Wall Street and fueled concerns of a deteriorating economy. "With lower confidence and rising economic uncertainty, it could be that consumers have decided to defer some relatively large, and often highly discretionary, travel spending," they said. Survey data also showed that lower-income households appeared more inclined to vacation within the US this year than in 2024, and that a higher share of less-affluent people are planning not to travel at all. But taken together, within the context of cratering consumer confidence, things seem to be pretty OK in a tough industry, despite it all. It's becoming increasingly clear that the brief, wondrous era of post-pandemic travel is well behind us. Trade war summer doesn't sound that enticing. But if this was the sentiment pre-China pact and trade war thaw, maybe there will be a higher cruising altitude in the months ahead. Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on X @hshaban. Click here for in-depth analysis of the latest stock market news and events moving stock prices
Yahoo
17-04-2025
- Business
- Yahoo
Gen Z Spends Twice as Much as They Have in Savings, Bank of America Study Finds
People typically fall into two categories: spenders and savers. When it comes to Gen Z, most seem to be spenders. According to a new Bank of America study, Gen Z has higher discretionary and necessity spending growth than the average consumer. For example, Gen Z spending growth on entertainment is up 25.5% year-over-year, and it's up 13.8% for travel. Read Next: Check Out: Unfortunately, their saving habits are not keeping up. According to the study, the average Gen Zer does not have enough in their savings account to cover a month of spending. Data from February showed that their spending-to-savings ratio was 1.93, meaning they were spending nearly twice the amount that they had in savings. Here's a look at why this generation's spending is outpacing its savings, the long-term consequence of this behavior and how Gen Z can strike a better balance moving forward. There are several factors contributing to the fact that Gen Z's savings are not keeping up with their spending. 'Part of this is due to Gen Z starting their financial journey,' said Taylor Bowley, economist at Bank of America Institute. 'They are coming from extremely limited spending to leaving their parent's house or their college campus and spending right out of the gate. And they're really spending on experiences like travel or going to concerts.' The other big factor is that they are entering an economic environment with high levels of inflation. 'Child care is a great example of this 'tale of two cities,'' Bowley said. 'On one hand, yes, Gen Z is just starting to possibly have kids of their own and need child care services, but the CPI growth for child care has been higher than the overall inflation rate. 'What's the result? Gen Z is spending more than twice the amount of what they have in their deposit balances.' Browley noted that this gap has increased since 2023 and remains much higher than other generations'. 'Another caveat here is that Gen Z, as a generation, also operates differently than baby boomers in that they are more likely to have multiple accounts for either investing or saving, so it's possible some of their financial picture isn't as clear cut as what we see in this ratio,' she added. Learn More: Gen Zers who routinely spend more than they save are starting their financial journeys off on the wrong foot. 'They risk getting caught in a cycle of debt that can delay financial independence or big goals like owning a home or starting a family,' said Holly O'Neill, president of retail banking at Bank of America. 'On top of that, without savings to fall back on, Gen Z are more vulnerable to unexpected expenses and life's surprises — whether it's job loss, medical emergencies or car repairs.' For Gen Z, small steps can make a big difference in securing long-term financial stability. 'Create a spending plan to level up your money game,' O'Neill said. 'Whether you're just stepping into the workforce, adjusting to a new city, saving up for an epic post-grad adventure or tackling student loans, a realistic budget that evolves with you is essential.' The right savings approach depends on your personal circumstances and life stage, but she recommended starting with the 50/30/20 budgeting method. 'Allocate 50% of your after-tax income to cover needs (rent, student loans, groceries), 30% to wants (entertainment, dining out, subscriptions), and 20% to savings,' O'Neill said. 'However, don't be afraid to adjust the percentages to fit your financial priorities. The key is to make it work for your goals and circumstances.' She also recommended practicing mindful spending. 'It's tempting to splurge when you start earning money, but developing mindful spending habits early on is key,' O'Neill said. 'Living within your means — or even below them — will leave you with more money at the end of each month, giving you the flexibility to pay down debt, boost your savings or treat yourself occasionally.' In addition, it's essential to open a savings account if you don't have one already, and add to it regularly. 'A separate, dedicated savings account safeguards your deposits and helps you be intentional about saving,' O'Neill said. 'Remember the long game — saving is a marathon, not a sprint. Don't get discouraged by short-term setbacks. Stay focused on your goals and celebrate your progress along the way.' To ensure you stick to your savings goals, O'Neill recommended making the process automatic by setting up reccurring transfers — even if it's just a small amount each week. 'Pay yourself first by treating savings like a nonnegotiable bill you have to pay,' she said. 'You'll be surprised how quickly it adds up.' More From GOBankingRates Mark Cuban: Trump's Tariffs Will Affect This Class of People the Most4 Affordable Car Brands You Won't Regret Buying in 2025How To Get the Most Value From Your Costco Membership in 20255 Types of Vehicles Retirees Should Stay Away From Buying This article originally appeared on Gen Z Spends Twice as Much as They Have in Savings, Bank of America Study Finds Sign in to access your portfolio
