What Is American Express Saying About the State of the Travel Market?
Consumer spending on travel and entertainment has driven a ton of economic growth as the world moves further away from the COVID-19 pandemic lockdowns. However, there is concern in economic circles that this growth in spending will only be a short-lived burst that tails off over the next few years once people get their travel fix in. For example, in China -- which didn't issue broad-based stimulus checks like the U.S. -- consumer spending has been much more muted even with pandemic closures officially over.
American Express's (NYSE: AXP) second-quarter earnings show that these concerns have not materialized in Western markets, at least not yet. Spending on travel and entertainment across the company's credit cards is growing at a solid double-digit percentage rate with big contributions from younger millennial and Gen Z consumers. In the middle of 2023, it looks like the recent travel boom still has plenty of room to run.
What is American Express telling us about the travel market, and what does it mean for the stock over the long term? Let's dig into the numbers and find out.
Source Fool.com
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