By Americans are still spending, but strong consumer demand is masking an uneven financial picture. Recent corporate earnings show robust spending on travel, restaurants and everyday purchases, while affluent households remain willing to spend and price-conscious shoppers increasingly look for bargains. Elevated credit-card debt and pockets of stress among riskier borrowers suggest not everyone has the same financial cushion, though the latest evidence does not point to a broad consumer-credit crisis.
The distinction matters for investors, businesses and families. Strong sales can sustain economic growth even while some consumers struggle to pay their bills. To assess the household outlook, it is necessary to look beyond revenue growth and examine what banks, payment networks, retailers, airlines and consumer-goods companies are reporting alongside the latest credit data.
Affluent Consumers Are Still Spending
American Express offers one of the clearest signals. In the third quarter of 2026, the company reported record revenue of $20.1 billion, up 9% year over year, while card spending rose 8% to $454 billion. Spending on travel and entertainment increased 10%, airline purchases rose 13%, and restaurant spending climbed 9%. The company also raised its full-year earnings guidance. Its net write-off rate declined slightly year over year to 1.8%.
These results suggest that higher-income consumers have not abandoned discretionary spending. However, American Express has a relatively affluent customer base, making its performance an imperfect measure of a typical household’s financial condition.
Airlines tell a similar story. Delta Air Lines reported record September-quarter operating revenue of $17.6 billion, while American Airlines reported third-quarter revenue of $16.3 billion, up 19.3% from a year earlier. American’s results also illustrate the limits of interpreting revenue as a measure of economic health: Its adjusted net loss was $182 million, as fuel expenses increased by $1.9 billion year over year.
Demand for travel, restaurants and other discretionary activities remains resilient, but higher prices, operating costs and the spending power of wealthier customers complicate the picture.
Price-Conscious Consumers Are Hunting For Value
Retailers provide a different perspective. Dollar General and Dollar Tree exceeded quarterly sales expectations in August as shoppers sought cheaper groceries and household essentials. Consumers facing higher food and fuel costs are increasingly attentive to value, according to recent earnings reports and financial analysis.
This does not necessarily mean that consumers are buying less overall. Instead, they are shifting where they shop, switching brands, using promotions or reducing purchases of discretionary items to protect their budgets.
Consumer-goods companies face a related challenge. PepsiCo reported third-quarter 2026 revenue growth of 5.6% and organic revenue growth of 3.1%, with organic volume growth across beverages and convenient foods. Yet management also emphasized the need to improve performance in North America.
The distinction between revenue and volume is critical. Revenue can rise because prices increase even when customers buy fewer units. Volume growth provides a more direct, though imperfect, indication of underlying demand.
What Card Networks Retail Sales And Banks Are Showing
Other payments data point the same way. Visa reported that payments volume for the quarter ended June 30, 2026 rose 10% in constant dollars, passing $4 trillion for the first time, while net revenue rose 14% to $11.6 billion; management said both discretionary and nondiscretionary spending remained strong.
Mastercard reported that second-quarter gross dollar volume rose 8% in local currency to $2.9 trillion, with net revenue up 14% to $9.3 billion. Both sets of results are for the April-June period. Visa is scheduled to report its latest quarter on Oct. 27 and Mastercard on Oct. 29, so these figures may be updated shortly.
Government data show solid but price-affected growth. The Census Bureau estimated September retail and food-services sales at $745.0 billion, up 0.8% from August and 6.3% from a year earlier. These figures are not adjusted for inflation, and much of the monthly gain reflected fuel: gasoline-station sales rose 6.4%, and total retail sales excluding gasoline rose only 0.2%. Food services and drinking places rose 1.1%.
Large-bank third-quarter results, reported on Oct. 13, also show spending growing faster than credit losses. JPMorgan said debit and credit card sales volume rose 10% year over year, while its card net charge-off rate fell to 2.91% from 3.15% a year earlier. Wells Fargo’s card charge-off rate declined to 3.73% from 4.02%, and Citigroup reported U.S. card spending up 11% with charge-offs of 3.6%, down from 4.0%. These lenders serve mostly prime borrowers, so their results fit the Philadelphia Fed’s large-bank findings but say less about the weaker-credit borrowers noted above.
The takeaway: Card-network, retail-sales and bank data reinforce the spending story, but the retail-sales gain was boosted by higher fuel prices and the credit-loss improvements come from large lenders, so neither settles how lower-income households are faring.
Record Credit Card Debt Does Not Tell The Whole Story
The household-debt figures provide a necessary counterweight to corporate optimism. The Federal Reserve Bank of New York reported that U.S. household debt totaled $18.77 trillion at the end of the second quarter of 2026. Credit-card balances reached $1.263 trillion, up $54 billion from a year earlier. Total household debt, however, declined by $13 billion during the quarter. The share of outstanding household debt in some stage of delinquency fell slightly to 4.7%.
The level of credit-card debt is concerning, but its growth does not automatically indicate financial distress. Balances can rise because households are spending more, prices are higher, or more purchases are being made with cards. The critical question is whether consumers are paying those balances off or carrying them forward at high interest rates.
The Philadelphia Fed’s Oct. 7 analysis of large-bank data offers some reassurance. Total card balances grew 3.4% year over year in Q2, while revolving balances—debt carried from one billing cycle to the next—grew only 1.5%. The share of accounts paid in full reached 37%, matching a pandemic-era high. Large-bank credit-card delinquency and net charge-off rates had also declined for more than a year.
Nevertheless, the improvement is not universal. The share of newly opened large-bank card accounts belonging to consumers with credit scores below 660 increased from 16.1% in the second quarter of 2025 to 18.5% in the second quarter of 2026. Aggregate figures can conceal growing stress among riskier borrowers.
Are Defaults Actually Rising?
The latest comprehensive New York Fed data show a mixed picture. Serious-delinquency transition rates, the annualized share of balances moving into the category of 90 or more days past due, were broadly stable for credit cards and auto loans, while the mortgage rate increased. These figures measure new transitions into serious delinquency, not the percentage of all outstanding loans currently in default.
Credit-card distress remains elevated, but these figures do not establish a new, broad-based surge in defaults. Mortgage transitions into serious delinquency have increased, although the available evidence does not indicate a generalized mortgage crisis. Auto-loan transitions have edged higher, while the overall household-debt transition rate has declined.
Personal loans require caution. The New York Fed’s broader “other” debt category includes retail cards and consumer-finance loans; it is not a clean measure of personal loans alone. A definitive claim that personal-loan defaults are broadly rising would therefore require additional comparable lender data.
Spending Strength Is Not Financial Strength
The American consumer remains an important source of economic resilience. Corporate earnings show that households continue to spend money on travel, restaurants, food, and other goods. Meanwhile, slower revolving credit-card balance growth and improving large-bank credit-loss measures suggest that many borrowers are managing their obligations.
But the strength is uneven. Affluent consumers’ discretionary spending can coexist with pressure on families that devote a larger share of their income to housing, food, transportation, and other necessities. Discount-store performance and elevated credit-card debt reinforce the need to look beyond aggregate sales.
For households, the practical lesson is straightforward: a large monthly card bill is not necessarily a problem if it is paid in full. Persistent revolving balances, minimum payments, missed bills, and borrowing to cover essentials are more concerning signals.
The next two quarters will help clarify whether spending remains supported by income and confidence or increasingly depends on credit. Until then, the evidence argues against declaring either a consumer boom that benefits everyone or an imminent credit crisis. Americans are still spending—but the financial capacity to keep spending is far
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