Bank of America’s spending data tells a rare good-news story about Gen Z — until it doesn’t. After years of being squeezed by surging rents and sluggish wage growth, the youngest adult generation had just begun to really get out there and spend their fun money. Then gas prices jumped 26% year-over-year, and BofA economists are now warning that the recovery could be snuffed out before it fully takes hold.
For the first time in years, Gen Z was winning. Rents had finally stopped devouring their paychecks, wages were rising faster than their housing costs, and a generation that had long trailed older Americans in spending growth was starting to actually open its wallet — on restaurants, new clothes, electronics, even travel. Then came the oil shock, brought on by President Donald Trump’s widely expected and yet also still surprising decision to go to war on Iran.
A recent report from the Bank of America Institute shows that after nearly two years of trailing other generations in spending, Gen Z’s year-over-year spending growth surpassed Baby Boomers’ in mid-2025. Millennials followed suit in December 2025, outpacing older generations for the first time in roughly three years. The turnaround was real, data-driven, and — for a generation that came of age during pandemic shutdowns and an inflation crisis — long overdue.
