Senior executives at several of the largest U.S. banks reported cautious optimism about consumer health, saying households have continued to spend and carry slightly higher loan balances even as borrowing costs stay elevated. The view was expressed against a backdrop of persistent inflationary pressures and geopolitical uncertainty that could influence future price trends and household budgets.
Bank of America Chief Executive Brian Moynihan told analysts that "The U.S. economy has proved more durable than expected," noting that recent spending had expanded and continued to "outperform" expectations. His comments came as big banks shared results showing credit-card portfolios as a notable source of loan growth, while overall credit quality remained broadly stable.
Executives also acknowledged unevenness in how consumers are coping. Lower-income households face mounting cost pressures, even as a still-strong labor market and wage growth underpin consumption for many. Banks warned that a prolonged escalation in the U.S.-Iran war - which has already pushed oil prices higher - could further squeeze household budgets by raising costs for essentials and crimping discretionary spending. That prospect adds uncertainty to the outlook for interest rates and inflation.
Inflation remains elevated: the Consumer Price Index rose by 3.5% in the 12 months through June after a 4.2% increase in May, which was the largest year-on-year jump since April 2023, according to Labor Department Bureau of Labor Statistics data cited by the banks.
Mixed loan growth but uniform card gains
Across JPMorgan, Bank of America and Wells Fargo, consumer loan trends were mixed, although all three reported increases in credit card balances.
JPMorgan, the largest U.S. lender, recorded a 7.3% rise in period-end credit card loans for the quarter, bringing balances to $249.9 billion. At the same time, consumer balances excluding credit cards were down about 1% from a year earlier.
Bank of America reported a 3.2% increase in overall consumer loans and a 4.4% jump specifically in credit card balances. The bank also noted slight upticks in home equity and residential mortgage balances.
Wells Fargo said total consumer loan balances rose 5.4%, driven in part by a 32% increase in auto loans. The bank's credit card balances climbed close to 5.6%, while residential mortgage balances declined modestly.
What rising card balances mean
Rising credit card balances are profitable for large banks because they deliver outsized interest income and fee revenue, making card lending one of the most lucrative segments of consumer finance. At the same time, banks caution that growing reliance on card credit can signal mounting pressure on household budgets.
JPMorgan Chief Financial Officer Jeremy Barnum said on the company’s earnings call that spending had remained robust across income segments and that delinquencies were lower than the bank had anticipated. Wells Fargo Chief Financial Officer Michael Santomassimo told analysts that delinquency trends have outperformed their models in most months, adding: "On the consumer side, it really is good. The delinquency trends are better than we modeled most months... overall, you’re seeing really good performance."
Industry observers pointed to rising mortgage and auto borrowing as additional evidence that some households feel confident in their income prospects. "People don’t buy a home and take on that type of debt unless they are feeling more secure in their income prospects," said Brian Jacobsen, chief economic strategist at Annex Wealth Management. Brian Mulberry, chief market strategist at Zacks Investment Management, observed that by the numbers both the economy and the U.S. consumer look strong.
Employment and broader balance-sheet context
Banks emphasized that employment levels and household balance sheets have generally remained healthy despite some consumers relying on credit to manage higher living costs. However, labor-market data show some softening: U.S. job growth slowed sharply in June, when nonfarm payrolls rose by 57,000 jobs, well below expectations for a 110,000 increase.
That said, employment gains averaged 111,000 per month in the second quarter, which is substantially higher than the 34,000 monthly average for the same period a year earlier. Banks said these labor-market dynamics, alongside still-elevated wage growth for many workers, have supported consumer spending and loan repayment capacity to date.
Overall, bank executives portrayed a consumer sector that remains resilient on several fronts - spending patterns, credit-card-driven loan growth and stable delinquencies - while flagging the potential for external shocks and unevenness across income groups to alter that picture.