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Consumer spending in the United States has been rising for months as Americans make up for lost time traveling, shopping and dining out following easing of pandemic restrictions and as COVID-19 retreats from its peak levels.
The trend has also fueled bullish spending forecasts from executives at major Wall Street banks including JPMorgan Chase & Co (NYSE:JPM), Wells Fargo (NYSE:WFC) and Bank of America Corp (NYSE:BAC).
Travel and entertainment spending rose 121% on a forex-adjusted basis compared with a year earlier and hit pre-pandemic levels globally for the first time in March, AmEx said.
Overall spending grew 35% globally on a forex-adjusted basis with volumes reaching a monthly record high in March as spending by millennial and Gen-Z AmEx cardholders jumped 56%.
Shares in American Express (NYSE:AXP), however, fell 1.2% before the bell as the company’s expenses surged 34% in the quarter on higher customer engagement and compensation costs.
Spending on goods and services, which is the biggest payments category on AmEx, rose 21% highlighting robust pent-up demand from consumers.
The payments company expects strong momentum for the rest of 2022 with annual net revenue growth between 18% and 20%, and earnings per share of $9.25 to $9.65.
AmEx posted net income of $2.1 billion, or $2.73 per share, for the quarter ended March 31, compared with $2.2 billion, or $2.74 per share, a year earlier. Analysts on average were expecting a profit of $2.44 per share, according to Refinitiv IBES data.
The New York-based company’s total revenue excluding interest expense rose 29% to around $11.74 billion.
