Despite economists’ recessionary outlooks, American Express CEO Stephen Squeri doesn’t see a significant downturn coming soon.
Key Details
- American Express CEO Stephen Squeri says he doesn’t see any spending trends that suggest an economic downturn in the near future.
- The company reported revenue growth of 23% and 15%, respectively, in its U.S. consumer services and retail segments in the last quarter.
- The company did come a little short on earnings and volume compared to Wall Street estimates, but Squeri says, “We aren’t seeing recessionary signals.”
Why it’s news
Analysts have been warning of a looming recession for months as the U.S. battles high inflation rates, but American Express CEO Stephen Squeri says he does not see an economic downturn in sight.
Squeri says most Americans have remained constant with spending, and money inflow to accounts has been steady, and there have not been any trends in American spending habits that he thinks could be predicting a recession.
“The only thing that we saw in the fourth quarter was small business, some decrease in spend, not as much growth in spending, really in digital advertising, so we’re going to watch that. I’m not sure what that’s really a function of right now—whether it’s a function of the economy or of confusion on where to advertise right now,” Squeri said to YahooFinance.
He says a lot is happening with technology that his company will watch, but overall, the consumer is strong. Travel bookings are up 50% from the pandemic, and spending remains steady.
Squeri isn’t the only credit CEO with a positive outlook for the future. Bank of America’s Brian Moynihan said consumers remain resilient and they’re spending nicely.
On the other hand
Some economists are adamant that a recession is on the way.
Economic growth is expected to have slowed slightly in the last quarter as retail spending slowed down. Some say this slowdown marks a looming recession while others believe it is still too early to tell.
NatWest chief U.S. economist Kevin Cummins sees a recession in the future. He says the effect of the Fed’s rate hikes has not hit yet and will send the economy into a recession.
“Real export growth is going to be weak. Inventories have been rebuilt enough that you’re not going to get much juice from that,” he says. “It just seems like all the major components in GDP are all on the same side going forward, pointing to weaker growth.”
