American Express Sees Steady Spending Growth Amid Economic Concerns

American Express (AmEx) is navigating a complex economic landscape, revealing an intriguing dichotomy between consumer spending habits and broader economic concerns. As Chief Financial Officer Christophe Le Caillec recently shared, affluent cardholders are continuing to spend robustly, with first-quarter transaction volumes driven significantly by younger customers. This trend is noteworthy, particularly as it highlights the evolving spending behaviors across different demographics amidst economic uncertainties.

In the first quarter, AmEx reported a 6% increase in billed business on its cards, which translates to a 7% rise when adjusted for the leap year. This sustained growth signals that the consumer spending surge witnessed in late 2024 has carried into 2025, even as stock markets experienced volatility driven by apprehensions over President Trump’s tariff policies and their potential to trigger a recession. Le Caillec noted that this consumer resilience allowed AmEx to exceed expectations for first-quarter profits, suggesting that a wealthy customer base might provide a buffer against economic turbulence.

Interestingly, while AmEx thrives, Synchrony Financial has voiced concerns about a spending slowdown among its clientele, which primarily consists of customers with store cards from popular retailers. This contrast emphasizes the varying outcomes in the credit sector, suggesting that not all financial institutions are equally insulated from economic pressures.

Delving deeper into consumer demographics, it becomes clear that younger generations—specifically millennials and Gen Z—are leading the charge in spending, with a remarkable 14% increase in their expenditures during the quarter. In contrast, older generations such as Gen X and Baby Boomers exhibited more cautious spending habits, showing increases of only 5% and 1%, respectively. This generational divide raises intriguing questions about the future of consumer spending as younger consumers, often seen as digital natives, wield more economic influence.

Le Caillec did acknowledge the possibility of an artificial boost in purchasing due to the anticipation of rising tariffs. This sentiment echoes concerns raised by JPMorgan executives, who suggested that some consumers may be accelerating purchases to sidestep higher costs. Notably, small businesses might be stockpiling inventory in light of potential price hikes, indicating a proactive approach to managing future expenses.

One particularly revealing aspect of AmEx’s performance is the increase in restaurant spending, which rose by 8%. As Le Caillec pointed out, dining out is a quintessential discretionary expense that cannot easily be postponed, serving as a barometer for consumer confidence. This uptick suggests that, despite broader economic anxieties, consumers still prioritize experiences, a trend supported by numerous studies linking discretionary spending to emotional well-being.

However, not all segments of the market are thriving. The airline industry, for instance, reported a mere 3% growth in transactions—significantly down from 13% in the previous quarter. This shift may indicate a retreat from travel as consumers weigh their options and reconsider spending in light of economic forecasts. While many companies are adjusting their earnings guidance due to tariff-related uncertainties, AmEx has maintained a steady outlook, projecting revenue growth between 8% and 10% and earnings per share between $15 and $15.50. Still, it has introduced a new caveat: these projections are “subject to the macroeconomic environment,” which underscores the potential volatility ahead.

In conclusion, American Express stands as a testament to the resilience of affluent consumers, particularly younger generations, amidst a backdrop of economic uncertainty. The company’s ability to maintain growth and profit projections while navigating potential pitfalls reflects its unique positioning in the market. As consumer preferences continue to evolve, especially among younger demographics, businesses across various sectors may need to adapt their strategies to align with these shifting trends. The future remains uncertain, yet the data suggests that for now, the affluent consumer is still willing to spend, providing a glimmer of hope in an otherwise tumultuous economic landscape.