Americans are not buying the fancy dog food anymore. That is the actual, real, data-driven signal that the CEO of Bank of America is using to explain what inflation and a 40% jump in gas prices are doing to 70 million ordinary people. Fido is eating store brand kibble so his owner can fill the tank.
The Pet Food Aisle Knows the Truth
Brian Moynihan, who runs the second-largest bank in the United States and has access to real-time spending data on tens of millions of Americans, told NBC News that premium pet food purchases on Bank of America credit and debit cards are noticeably down. This is happening, he noted, despite aggressive advertising campaigns by the high-end brands. People are seeing those ads. They are choosing the cheaper bag anyway.
"What you're seeing is people are shifting, so people shift around and make room for the higher gas prices," Moynihan told NBC News. "That's the reality of the day-to-day consumer." That sentence, stated plainly and without drama by a man who manages a $3 trillion bank, should land harder than it does.
This is what economists call "trading down." Regular people call it "I cannot afford the same things I could afford before, so I am quietly buying worse versions of them and hoping nobody notices." The dog notices. The dog is not pleased.
Why Gas Prices Are Eating the Budget
NBC News reports that Americans were paying around 40% more at the pump than they were before the United States launched a war against Iran. That is not a typo. Forty percent. If you were spending $60 to fill your tank before the war, you are now spending around $84. Every week. That money has to come from somewhere, and apparently it is coming from the premium pet food aisle.
Inflation also outpaced wage growth in May for the second consecutive month, according to NBC News. So prices are going up faster than paychecks. The gap between what things cost and what people earn is widening, not shrinking. This is the economy that the Trump administration has produced, and it is showing up in dog bowls across America.
But Here's Where It Gets Weird
Here is the thing that will make your head hurt. Despite all of this, total spending on Bank of America credit and debit cards was up 5% in May compared to the same month last year. Five percent. People are swapping the good dog food for the cheap dog food, and then apparently booking a vacation.
Moynihan told NBC News that consumers "are still spending on vacations and things like that" and "still go out to eat." So the picture is genuinely complicated. Americans are stressed, they are pessimistic, they are telling every pollster who calls them that the economy is terrible and they are scared. And then they are going to dinner.
"We watch what they do, not what they say," Moynihan said. What they are doing is spending money. What they are saying, loudly and consistently, is that they feel terrible about it. Both of those things are true at the same time, and that tension is not sustainable indefinitely.
The Vibes Problem Is Real, and It Is a Warning Sign
Moynihan was careful not to wave away the pessimism, even while pointing to the spending data. NBC News reports he acknowledged the economy is facing a "vibes problem," with Americans overwhelmingly negative in surveys about their financial situation and the overall economy. He is treating that gap between sentiment and behavior as a warning light, not a reason to relax.
"What they're saying is they're very upset and they're worried about high prices, affordability," he told NBC News. "We have to watch that, because if it goes from 'what they say versus what they do' to what they're doing, that's a real problem for the U.S. economy." Translation: right now, people are worried but still spending. If they get scared enough to stop spending, this whole thing tips over. Consumer spending drives the majority of U.S. GDP. The moment people stop going to dinner and start hoarding cash, the recession they are already afraid of becomes the recession they actually get.
His Message to CEOs: Hire People, Don't Just Fire Them Into an Algorithm
Moynihan used the NBC News interview to deliver what amounts to a public challenge to other corporate leaders on artificial intelligence. Bank of America recently hired 2,000 recent college graduates and 2,000 summer interns, and the bank pledged to hire 10,000 veterans and 8,000 community college students over the next five years. Moynihan said CEOs need to be actively hiring entry-level workers and training them to work alongside AI, not planning for a future where those workers simply do not exist.
"Apply AI, because you need to do that for the shareholder, and make sure you're making money. But do it in a way that you're making sure that you're reskilling your people, retraining your people," he said, according to NBC News. This is not a radical idea. It is, in fact, exactly what every corporate leader claims they are committed to doing in press releases. Whether they are actually doing it is a different conversation entirely.
Bank of America raised its minimum wage to $25 an hour last year, pushing starting annual salaries above $50,000. The bank employs roughly 210,000 people and needs to hire between 1,300 and 1,500 workers a month just to keep pace with turnover and retirements. Moynihan noted that with that kind of constant churn, deliberate planning around retraining is not optional. "Affordability is very tough on people, but we have to do our part to make sure our teammates can live well."
The Dingo Take
Let's be honest about what this story is actually describing. The CEO of one of the largest financial institutions on the planet is sitting on real-time data from 70 million Americans, and the most illustrative example he can find of what this economy is doing to people is that they can no longer afford the dog food they used to buy. Not a luxury. Not a vacation home. Dog food. That is where the 40% gas price spike from a war against Iran is showing up in household budgets.
The spending-versus-sentiment gap Moynihan is watching is the scariest part of this story. Right now, people are scared but still swiping. That can hold for a while. It cannot hold forever. At some point, the pessimism that shows up in every single consumer confidence poll starts to show up in the spending data too, and when that happens, the economy does not slow down gently. It stops. The administration that created these conditions by launching a war that sent gas prices through the roof will then spend considerable energy explaining why it is actually someone else's fault.
Moynihan, to his credit, is saying the quiet parts out loud. He is not pretending inflation is fine or that a 40% jump at the pump is painless. He is watching the data, telling us what it shows, and flagging the risk clearly. What he cannot do is fix the policy decisions that put us here. That part belongs to the people in charge. They are currently not fixing it.
