Shoppers carry bags in San Francisco, California, on Thursday, September 29, 2022.
David Paul Morris | Bloomberg | Getty Images
US consumers have shown their willingness to continue paying higher prices in the face of a stagnant economy that could slide into recession, according to the credit card giants. American Express And the American bank.
American Express on Friday reported stronger-than-expected third-quarter earnings and revenue, while raising its full-year forecast. The company said total customer spending jumped 21% year over year, driven by growth in goods and services as well as travel and leisure.
Travel demand is particularly resilient because Americans are making up for flights delayed due to the pandemic. Consumers are also spending on food and entertainment after the pandemic lockdown eased.
American Express said the travel and leisure segment saw spending up 57% from a year ago as volumes in its international markets topped pre-pandemic levels for the first time in the third quarter.
“Cardmember spending has remained at near-record levels in the quarter,” American Express CEO Stephen Squire said Friday in an earnings call. “We expected the recovery in travel spending to act as a tailwind for us, but the strength of the recovery exceeded our expectations over the course of the year.”
The Bank of America is not seeing any slower growth in spending even though inflation is at record levels. Executive Director Brian Moynihan He said earlier this week that Bank customers continue to spend freelyusing their credit cards and other payment methods to increase transaction volumes by 10% in September and the first half of October compared to the previous year.
“Analysts may wonder if talking about inflation, stagnation and other factors is possible [result] “Spending growth is slower,” Moynihan said Monday during a conference call. [that] Here at Bank of America.”
However, recent economic data has shown signs of stagnation in consumer spending. Retail sales and food services changed a little for September after rising 0.4% in August, according to pre-assessment from the Ministry of Commerce.
Consumers may have started growing wary of profligacy as prices rose sharply and the Federal Reserve raised interest rates to slow the economy.
– CNBC’s Heo Soon and Jeff Cox contributed to this report.
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