US consumers and businesses are holding up despite high interest rates. Third-quarter results from JPMorgan Chase, Wells Fargo and Citigroup showed that the US economy remained resilient even as borrowing costs stayed high.
Spending and lending continued to grow compared with the same period last year, while loan losses remained largely under control.
JPMorgan’s average credit card loan balances increased by 7% compared with the same period last year, showing continued borrowing by customers. At the same time, its credit card charge-off rate fell to 2.91% from 3.15% a year earlier. The bank’s consumer loan balances increased by 4% compared with a year earlier. Its credit card charge-off rate also declined to 3.73% from 4.02%, pointing to an improvement in this measure of credit losses.
JPMorgan, Wells Fargo and Citigroup reported signs of continued consumer strength. Wells Fargo reported growth in consumer loans and lower credit card losses .
Their credit data also showed that several measures of missed loan payments and credit card losses had improved compared with a year earlier, according to Yahoo Finance. Wells Fargo CEO Charlie Scharf said customers remained financially healthy. Scharf said investment in artificial intelligence infrastructure , high employment levels and wage growth continued to outweigh risks from higher interest rates, rising oil prices and inflation.
Results from the three major US banks showed that customers continued to spend and borrow despite higher interest rates. Charge-offs refer to debts that banks consider unlikely to be recovered. He pointed to higher consumer spending, low loan delinquencies and growth in deposit and investment balances as signs of financial strength. These factors were helping support consumers and businesses despite economic pressures, as quoted by Yahoo Finance.
Speaking on Tuesday, Scharf said the bank’s data showed that consumer and business customers were doing well.
