October Credit Card Spending Up Says American Express

Even though the economy is still in a slump and unemployment continues to rise, American Express is seeing signs that economic recovery may be proceeding, albeit a little slow.

Recently, American Express announced that consumer spending on their credit cards increased last October, which is the first time that it happened this year. This is an encouraging sign, American Express says, which shows that consumer confidence regarding the current economy may be slowly rising.

During a conference sponsored by Bank of America Merrily Lynch, Kenneth Chenault, the Chairman and CEO of the company said that the company’s billed business, the amount that is charged on credit cards carrying the American Express name, increased by 3% for October compared to the same month last year. For the month of September, the company saw a 5% decline in billed business and, for the month of August, the decline was more than 10%.

Chenault said that consumer spending had been steadily improving since last spring. The declines seen in billed business may have finally “bottomed out”, he said. After the presentation, the New York-based lender’s shares rose by 62 cents to $39.67.

Even with these turn of events, the economic crisis is far from over, however. Chenault continues to remain cautious. He notes that the continuing economic challenges such as the already high and still increasing unemployment rate will make economic growth quite slow as the economy continues to recover. However, Chenault is encouraged by the spending and credit improvement trends that he has seen.

“There are signs that the recession may be approaching an end”, the Chairman said.

During the last month, American Express announced that the company’s third quarter earnings had fallen by 22% to $632 million compared to the same period the year before. However, the company also said that there were signs that it was seeing which indicated that the declining spending among consumers was on the way to stabilizing and the continued growth of losses from loans was easing up.

The company said that, although credit card spending during the third quarter had fallen by 11%, that was still an improvement. During the second quarter, credit card spending had declined by 13% according to the company.

American Express also said that the rate of loan losses the company saw during this year period was at 8.9%. This is an improvement from the rate that the company saw during the second quarter which was at 10%.