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AmEx says consumers picked up their spending in October; shares soar to 14-month high
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NEW YORK - American Express Co. said Tuesday that spending on its credit cards increased in October for the first time this year, an encouraging sign that consumers may be feeling more confident about the economy.
Speaking at a conference sponsored by Bank of America Merrill Lynch, Chairman and CEO Kenneth Chenault said billed business, or the amount charged on American Express cards, rose 3 percent in October compared with the same month last year, after a more than 5 percent decline in September and a more than 10 percent decline in August.
Spending has steadily improved since the spring and the declines in billed business appear to have "bottomed out," Chenault said.
Following the presentation, shares of the New York-based lender rose 62 cents to $39.67.
Still, Chenault remains cautious, noting that economic challenges like high unemployment persist, and that economic growth will likely be slower going forward. But he is encouraged by the improving trends in spending and credit that he is seeing.
"There are signs that the recession may be approaching an end," he said.
Last month, American Express said its third-quarter earnings fell 22 percent from the prior-year period to $632 million, but that it was seeing signs that the decline in spending could be stabilizing and the rise in loan losses easing.
Cardholder spending fell 11 percent during the third quarter, but that was an improvement over the 13 percent decline in the second quarter, the company said.
The rate of loan losses slowed to 8.9 percent during the period from 10 percent in the second quarter.
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