MW Corporate America keeps calling consumers 'resilient.' Consumers beg to differ.

Andrew Keshner

Americans say they're feeling financial pressure - but it's not showing up in banks' bottom lines

Executives and analysts now have a favorite word that highlights the mismatch between what consumers say about their finances and what companies are seeing in their own bottom lines: resilience.

So far during the corporate earnings season that began this week, big banks and other major companies have said consumers are holding up and continuing to spend. Thursday's above-forecast retail sales for June reinforced that message.

These rosy pronouncements come against a backdrop of potential tariff-related price pressures on consumers, a housing market flashing warning signs and a job market whose top-line growth obscures a more complicated picture - plus survey results and consumer data that suggest more people are struggling financially, even as they keep shelling out money.

Still, when business leaders and economists describe the past quarter and the recent moment, they consistently invoke that word.

"Consumers remained resilient, with healthy spending and asset quality, and commercial borrower-utilization rates rose," Bank of America $(BAC.SI)$ Chief Executive Brian Moynihan said in a Wednesday statement.

Citigroup (C) CEO Jane Fraser said the broader economic environment has "proven to be more resilient than most of us anticipated, but we aren't dropping our guard as we begin the second half of the year," according to a FactSet transcript. Meanwhile, "the strength of the U.S. economy, driven by the American entrepreneur and a healthy consumer, has certainly been exceeding expectations of late," she added.

There's been "remarkable resilience" in spending, American Express $(AXP.AU)$ Chief Financial Officer Christophe Le Caillec told MarketWatch.

"Don't count the American consumer out yet," said Heather Long, chief economist at Navy Federal Credit Union - pointing to the strong retail-sales numbers, low jobless claims, and the fact that shoppers are ready to jump at deals even with tariff worries. "The word of the summer for the economy is resilient."

Even when they don't use that exact word, other executives share similarly positive outlooks. While there's been more financial stress for lower-income customers, that's always the case, Jeremy Barnum, JPMorgan Chase & Co.'s (JPM) chief financial officer, told analysts. In the big picture, "we continue to struggle to see signs of weakness. ...The consumer basically seems to be fine," he said, according to an AlphaSense transcript.

Though it's early into earnings season, use of the word "resilient" remains, well, resilient.

In the first half of July, roughly one-quarter of earnings transcripts had at least one mention of the word "resilient" from a business executive or analyst, according to a word-search analysis via FactSet. That's consistent with the share of transcripts that mentioned it in the first half of the year and the second half of 2024.

But during a week when banks and big businesses said consumers were showing resilience - which means an ability to recover or adjust, particularly under stress - measures of Americans' moods and financial well-being cast fresh doubts on that premise.

Consumer sentiment brightened slightly this month, reaching a five-month high in the University of Michigan's ongoing gauge of Americans' mood. But sentiment is still "well below" historical averages, researchers said Friday.

Then there was a sweeping look at Americans' finances released Wednesday.

A record share of Americans in 2024 - 26% - said their spending exceeded their income, the Finra Foundation's National Financial Capability Study found. A sharply lower share of respondents, when compared with 2021, said they had no problems covering their expenses, according to the survey, which is conducted every three years and polled more than 20,000 people last summer and fall.

The share of people who said they had no problems with costs fell to 44% in 2024 from 54% in 2021 - the first substantial drop recorded for the question, researchers said. The survey began in 2009 during the Great Recession, when 36% of people said they had no difficulty paying their bills.

Fewer people said they had rainy-day savings funds and fewer were satisfied with their personal financial condition. More people said they carried balances on their credit cards and sometimes paid the minimum balance.

The Finra Foundation's numbers resonate with research from the Federal Reserve's regional banks. The share of credit-card accounts paying the minimum monthly balance hit a 12-year high in 2024's last quarter, but retreated slightly in the first quarter of this year, according to the Federal Reserve Bank of Philadelphia.

Car-loan and credit-card delinquencies are currently around their highest points since early 2011. Both delinquency rates eased slightly in the first quarter.

To be sure, there's no "one" consumer. Spending power and debt loads for lower-income consumers differ from higher-income consumers. The Finra Foundation results said there's a "struggle of the middle": From 2021 to 2024, some of the steepest declines in financial capability happened among households earning between $25,000 and $75,000.

Broadly speaking, Americans have less ability to withstand financial shocks, said Olivia Valdes, a senior researcher with the Finra Foundation. The survey's findings "suggest declining financial resilience compared to three years ago," she noted.

Valdes pointed to statistics including spending that outstripped income, less reported emergency savings, and more credit-card debt. "For much of the data we have examined, we are not seeing a disconnect between people's lived financial experiences and how they are perceiving their financial situation," Valdes said.

Philip van Doorn contributed.

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-Andrew Keshner

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July 18, 2025 13:26 ET (17:26 GMT)

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