Title: “American Express Sees Increased Spending from Affluent Cardholders, Boosted by Younger Generations”

In the final quarter of the previous year, American Express (AmEx) noticed a surge in spending from its affluent cardholders. This information came directly from the company’s Chief Financial Officer, Christophe Le Caillec, in a recent interview with CNBC.

Data from the company’s earnings presentation revealed that spending on AmEx cards rose by 8% year-on-year in the fourth quarter. This was a notable increase from a growth rate that had slowed to 6% during the second and third quarters, from 7% earlier in the year.

Interestingly, this spike in spending was not limited to any specific customer segment or geographic region. However, it was particularly driven by the spending habits of the millennial and Gen Z demographic, where transaction volumes leaped by 16%, an increase from the 12% in the third quarter.

In contrast, the older generations demonstrated more restraint with their spending. Gen X clients spent 7% more in the fourth quarter, while spending from baby boomers only grew by 4%.

Reflecting on these trends, Le Caillec expressed optimism for the future. He pointed out the strong growth from Gen Z and millennials, and the 2-percentage point acceleration as reasons for this optimism, especially looking ahead to 2025.

He also noted that high transaction levels have continued into the first few weeks of the new year. It is widely believed that younger Americans tend to spend more on experiences rather than goods, a trend clearly reflected in AmEx’s results.

AmEx, along with JPMorgan Chase, holds a dominant position in the market for high-end credit cards. Travel and entertainment billings rose by 11% in the quarter, compared to an 8% rise for goods and services. The increase in travel spending primarily came from a 13% rise in airline spending, with business class and first-class airfares experiencing a 19% increase, according to Le Caillec.

AmEx shares dipped by over 2% in midday trading on Friday after the company announced earnings and revenue that roughly met analysts’ predictions. However, the New York-based company’s shares have been on a steady rise over the past year, reaching a 52-week high on Thursday.

Analysts at William Blair, led by Cristopher Kennedy, wrote in a research note on Friday, “We are encouraged by accelerating billings growth as we believe it will be a key factor for AmEx to meet its aspirational target of at least 10% revenue growth. We remain buyers on any pullback.” This outlook signals confidence in the future performance of American Express, further encouraging potential investors.