US Consumers Continue Paying Higher Prices Despite Sluggish Economy, Says BofA and American Express

Grocery shopping - Via Unsplash - Marie-Michèle Bouchard
Grocery shopping - Via Unsplash - Marie-Michèle Bouchard

U.S. consumers are willing to continue paying higher prices in the face of a slow economy, and a looming recession, according to credit card giants American Express and Bank of America.

American Express on Friday reported stronger-than-expected third-quarter earnings and revenue, while raising its full-year forecast. The firm said overall customer spending skyrocketed 21% year over year, driven by growth in goods and services as well as travel and entertainment.

The demand for travel is rebosut as Americans make up for postponed trips due to the pandemic. Consumers are also indulging in food and entertainment after pandemic lockdowns eased.

American Express said its travel and entertainment segment saw spending soar 57% from a year ago with volumes in its international markets surpassing pre-pandemic levels for the first time in the third quarter.

“Card member spending remained at near-record levels in the quarter,” American Express CEO Stephen Squeri said Friday on an earnings call. “We expected the recovery in travel spending to be a tailwind for us, but the strength of the rebound has exceeded our expectations throughout the year.”