Younger Cardholders Boost AmEx Spending Late Last Year

What's the deal with American Express' spending spike last year? It's all about the younger folks! Last quarter, AmEx cardholders ramped up their spending by 8% compared to the previous year. This jump came after a slower period where growth rates hovered around 6% in the second and third quarters. But who's behind this spending surge? Millennials and Gen Z users led the charge, with their transaction volumes jumping 16% in the fourth quarter, up from 12% in the third quarter. Meanwhile, older groups like Gen X and baby boomers were more cautious, with spending increases of 7% and 4%, respectively. This spending boost wasn't just about buying stuff. Younger Americans love experiences, and that's reflected in AmEx's data. Travel and entertainment billings rose 11%, with a significant boost in airline spending, especially for business and first class tickets.

So, what's the buzz about 2025? AmEx's Chief Financial Officer, Christophe Le Caillec, is optimistic. He sees the 2 percentage point acceleration in spending from younger users as a good sign for the future. But what about the stock market? AmEx shares dipped more than 2% in midday trading after the company reported earnings that met analysts' expectations. Despite the dip, the company's stock has been on a roll, hitting a 52-week high just before the earnings report. Analysts at William Blair remain positive, noting that accelerating billing growth could help AmEx hit its target of at least 10% revenue growth. They're encouraging investors to buy the stock if there's a pullback.

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