REUTERS: AmEx Revenue and Consumer Spending

Is consumer spending trending up or down?

Running Point and its chief investment officer, Michael Ashley Schulman, CFA, were quoted by Reuters in an article — by Mehnaz Yasmin and Manya Saini, “AmEx raises revenue forecast on resilient card spending” — regarding today’s American Express earnings forecast and resilient consumer spending. The article was picked up by NASDAQ, MSN, and Skift.

  • Food and service prices are up, people need to spend more to consume the same everyday essentials they did a year ago
  • Price inflation is faster than salary inflation, it might make sense for a family to purchase some big ticket durables now rather than wait till the items increase more relative to wages
  • Even though bank interest rates are up, inflation is up more, thus the negative real rates people earn on cash are now closer to -6% rather than -2%, therefore people may be motivated to purchase some items now before their cash loses more value

Below are the excerpted quotes from the article:

“Even though the U.S. social-economic environment seems to be filled with recession fears, we’ve seen consumer spending continue to trend up over the last 18 months,” said Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors.

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Avid traveler and art fan, also Partner & Chief Investment Officer @Running Point Capital, a multifamily office and ultra high-net-worth money-management firm

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Michael Ashley Schulman

Michael Ashley Schulman

Avid traveler and art fan, also Partner & Chief Investment Officer @Running Point Capital, a multifamily office and ultra high-net-worth money-management firm