Introduction to American Express’ Spending Trends
American Express’ affluent cardholders are showing few signs of curbing their spending, and younger customers drove growth in first-quarter transaction volumes, according to Chief Financial Officer Christophe Le Caillec. Despite concerns about tariffs and inflation, the company’s wealthier customer base may help to insulate it from economic concerns.
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Billed business on AmEx cards rose 6% in the period, or 7% when adjusted for the impact of the leap year. This indicates that the bump in spending late last year continued into 2025. These trends have continued into April, despite sharp declines in stocks this month amid concerns that President Donald Trump’s tariff policies will cause a recession.
Resilience to Economic Concerns
The dynamic, which helped AmEx top expectations for first-quarter profit, shows that the company’s wealthier customer base may be less affected by concerns about tariffs and inflation. In contrast, Synchrony Financial, which offers store cards for dozens of popular retailers, has warned of a spending slowdown. According to Le Caillec, "There’s a lot of stability and strength, despite the news and the environment."
Demographic Spending Trends
Growth at AmEx came from younger cardholders, with millennial and Gen Z members spending 14% more in the quarter. Gen X and Baby Boomer cardholders showed more caution, registering 5% and 1% increases, respectively. This suggests that younger generations are driving spending growth, while older generations are being more conservative.
Spending Categories
One category that gave Le Caillec confidence that the spending trends may be durable is restaurant spending, which is up 8%. This is considered a discretionary expense and is not something that can be brought forward, making it a good indicator of the strength of AmEx’s cardmember base and their confidence.
Airline Slump
However, one area that showed weakness was in airline transactions, which grew just 3%, or 4% when adjusted for the leap year. This is a significant decline from the 13% growth seen in the fourth quarter.
Guidance and Outlook
Despite the uncertainty surrounding tariffs, AmEx is holding firm on its guidance for revenue growth of 8% to 10% and earnings of $15 to $15.50 per share this year. However, the company has added a new caveat to its guidance, stating that it is "Subject to the Macroeconomic Environment."
Conclusion
In conclusion, American Express’ affluent cardholders are showing resilience in their spending habits, driven by younger generations. While there are concerns about tariffs and inflation, the company’s wealthier customer base may help to insulate it from economic concerns. With a strong first-quarter performance and confident guidance, AmEx is well-positioned for continued growth, despite the uncertain economic environment.
