Banks Reporting Robust Credit-Card Spending -- Belies Consumers Glum View Of The Economy -- WSJ -- April 16, 2022

Link here.

U.S. consumers say they aren’t feeling great about the economy. But they have a curious way of showing it.

Pessimism about the economy has been on the rise due to surging inflation and falling household income since pandemic-related stimulus programs expired. But the latest round of bank earnings shows that apprehension hasn’t kept Americans from reaching for their credit cards.

The numbers.

First quarter spending, on credit cards, compared to a year ago:

• Citigroup: up 23%
• JPMorgan Chase: up 29%
• Wells Fargo: up 33%
• Bank of America: reports Monday, next week, April 18, 2022
  

I already know what a lot of folks will say about these numbers, but this is what caught my attention:

Bank executives pointed to higher spending on categories like travel, entertainment and dining as evidence of consumer strength. On Chase cards, travel and dining spending on rose 64% in the first quarter. 

“People like getting dressed up to go to dinner again in a restaurant,” Citigroup CEO Jane Fraser said Thursday.

And look at this. Compare 1Q22 with 1Q19, well before the lock downs:

At JPMorgan, spending totaled $236.4 billion, 37% higher than in the first quarter of 2019 and up 59% from its 2020 nadir.

And most interesting:

Inflation doesn’t seem to be straining household balance sheets just yet, JPMorgan Chief Financial Officer Jeremy Barnum said on a call with analysts Wednesday. Delinquencies remain below prepandemic levels. Even lower- and middle-income households aren’t giving the bank cause for concern, Mr. Barnum said.

Jamie Dimon, the bank’s CEO, said he wouldn’t normally expect net charge-offs, the amount the bank doesn’t expect to collect, to fall below 2.5%. It has now been below 1.5% for three straight quarters

Much more at the link.