Every quarter, we look to the largest banks to gauge the health of the American consumer. Together, JPMorgan, Bank of America, Capital One, and American Express see paychecks hit checking accounts, cards get swiped at retailers, and how many customers fall behind on payments.
This quarter, all four described consumers as being in good shape. People have jobs, paychecks are growing across income levels, and spending is up from a year ago. Credit is clean, even among riskier borrowers, and wealthier households are spending at a strong pace. If the Fed’s rate hikes push unemployment higher, credit will likely weaken. So far, there’s no sign of that.
Jobs and paychecks are holding up
JPMorgan and Bank of America serve the broad middle of the country through everyday checking accounts, debit cards, and prime credit cards. JPMorgan CFO Jeremy Barnum said the consumer is “currently very healthy, primarily because of a healthy labor market.” Debit and credit card spending at JPMorgan grew 10% from a year ago.
Barnum also described the risk. The Fed raised rates in September for the first time since 2023, and he said an extended rate cycle will, “almost by definition,” lead to higher unemployment and “weaker consumer credit results.” So far, he said, the consumer “has been quite resilient.” That’s despite years of high inflation, rising borrowing costs, and higher oil and gas prices
Bank of America sees the same strength in its deposit data. CEO Brian Moynihan said direct deposits from employers are growing for low-, middle-, and high-income customers, and that growth at the low end has “picked up.” That’s a good sign for lower-income households, who have been hit hardest by inflation over the past few years.
Moynihan also pointed to weekly unemployment claims, which have averaged about 190,000 over the past four weeks, below pre-pandemic levels. “So people are employed, we can see that,” he said. “We can see them getting more money.”
Asked whether he sees signs of consumer stress, Moynihan said, “absolutely not in terms of credit quality.” Bank of America’s card loss rate improved from the prior quarter, and delinquencies have declined year over year for six consecutive quarters. He did point to one source of strain. Spending on gas is up more than 20% as prices have climbed, which leaves people less to spend elsewhere.
Riskier borrowers are holding up
Capital One lends further down the credit spectrum than the other large card issuers, so it’s usually the first place strain shows up. There’s no sign of it yet. Card purchase volume grew 11% from a year ago, and the card charge-off rate, the share of loans written off as unlikely to be repaid, fell to 3.98% from 4.63%. CEO Richard Fairbank credited “the steady improvement in delinquencies that we observed in the first half of this year.” Strong recoveries also helped, meaning Capital One collected more than usual on debts it had already written off. That suggests some borrowers who fell behind now have enough room in their budgets to pay back what they owe.
Affluent spending remains strong
American Express charges annual fees on most of its cards, so its customer base skews affluent. CFO Christophe Le Caillec said customer behavior looked much like it has over the past year, with “strong and consistent spend growth” and “excellent credit performance.” Travel and entertainment spending, which households typically cut first when they become cautious, grew 10%.
U.S. consumer spending on Amex cards rose 9.4%. Growth slowed slightly from the second quarter and is still running ahead of 2024 and 2025. Credit is just as steady, with Amex’s delinquency rate holding between 1.2% and 1.3% for 15 straight quarters.
As we’ve written before, rising stock prices make wealthier households feel richer, and they tend to spend more as a result.
What this means
The consumer is in good shape. Four banks that together see a large share of U.S. spending said so, and their data backs it up. Spending is growing, paychecks are rising, and delinquencies remain low.
A strong job market and a growing economy are keeping the consumer on solid footing. As long as people stay employed, they keep spending and paying their bills. The risk is that higher rates eventually cool hiring. We haven’t seen that yet.
