American Express cardholders still spending despite Trump tariffs

American Express’ affluent cardholders are continuing to spend at a steady pace, with younger customers driving growth in first-quarter transaction volumes, according to Chief Financial Officer Christophe Le Caillec. Billed business on AmEx cards rose 6% in the period, or 7% when adjusted for the impact of the leap year, indicating that the increase in spending seen late last year has carried over into 2025.

Despite concerns over President Donald Trump’s tariff policies potentially causing a recession, AmEx’s customer base has shown resilience. The company’s wealthier clientele may help shield it from the effects of tariffs and inflation worries. In contrast, Synchrony Financial, which caters to a different market segment with store cards for popular retailers, has warned of a slowdown in spending.

Le Caillec noted that the positive trends have persisted into April, with growth driven primarily by younger cardholders. Millennials and Gen Z members increased their spending by 14% in the quarter, while Gen X and Baby Boomer cardholders showed more conservative growth rates of 5% and 1%, respectively. It remains uncertain whether cardholders are accelerating purchases ahead of potential tariffs, but some small businesses may be stockpiling inventory due to concerns about rising costs.

One encouraging sign for AmEx is the 8% increase in restaurant spending, which Le Caillec sees as a reliable indicator of consumer confidence. However, airline transactions saw a slowdown, growing only 3% in the first quarter compared to a 13% increase in the previous quarter.

Despite uncertainties in the macroeconomic environment, AmEx maintained its revenue growth guidance of 8% to 10% and earnings forecast of $15 to $15.50 per share for the year. The company’s resilience in the face of economic challenges reflects the strength of its customer base and their continued spending habits.