Surge in AmEx Spending Driven by Millennials and Gen Z

Spending on American Express (AmEx) cards surged by 8% year over year in the fourth quarter, with notable contributions from younger generations. Millennials and Gen Z propelled this growth, showcasing a 16% jump in transaction volumes compared to the previous quarter's 12%. This increase in activity comes despite a slowing growth rate earlier in the year, which saw declines from 7% to 6% in the second and third quarters. The rise in spending underscores a broader trend of younger Americans prioritizing experiences over material goods.

AmEx's stronghold in the high-end credit card market, alongside JPMorgan Chase, positions it well to capitalize on these spending patterns. Travel and entertainment billings, which rose by 11% during the quarter, highlight the shift towards experiential expenditures. Airline spending alone increased by 13%, with business class and first-class airfares seeing a significant 19% rise, indicating a preference for premium travel options. Goods and services also experienced an 8% billing growth, further contributing to the overall uplift.

Gen X customers increased their spending by 7% in the fourth quarter, while baby boomers recorded a smaller 4% rise in billings. These figures reflect generational differences in spending habits, as younger demographics continue to drive growth. The momentum from the fourth quarter has persisted into the first three weeks of the current year, signaling sustained consumer confidence and activity.

"We had very strong growth from Gen Z and millennials, and that 2 percentage point acceleration gives us a lot of optimism for 2025," said Christophe Le Caillec.

AmEx shares have performed strongly over the past year, reaching a 52-week high on Thursday. However, following the release of the company's earnings and revenue report, which aligned with analysts' expectations, shares fell more than 2% during midday trading on Friday. This fluctuation highlights market reactions to financial results and broader economic conditions.

"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," stated William Blair analysts led by Cristopher Kennedy.