00:00You can correct me if I'm wrong, but I think these are the numbers.
00:02One million new credit card accounts, 100,000 net new consumer checking accounts.
00:06That is real growth.
00:07Holly, where's that growth coming from?
00:08And what are the trends that you and the team are leaning into?
00:12Yeah, great.
00:13Good morning.
00:14And so that growth is coming across the board in the consumer segment.
00:19And as you mentioned, the consumer remains very resilient.
00:23So we are still seeing solid asset quality in our business.
00:28We're seeing good organic growth.
00:30We're seeing excellent liquidity for our clients.
00:33That's their core operating accounts are still over and above what they were pre-pandemic.
00:39And they're still spending.
00:42So spending growth was up 4.3% year over year, which is the highest rate of growth we've seen
00:49since 2023.
00:51And as you mentioned, gas prices are part of that growth.
00:56But even when you peel the gas prices away, the growth is still there.
01:01So 3.6% when you take that gas price increase out.
01:06Holly, a lot of the numbers we talk about are aggregate figures.
01:09Can you break it down across consumer groups?
01:11How broad-braced is that so-called resilience?
01:15So the core resilience, we are seeing it across all cohorts.
01:19However, we are still seeing really very strong spending growth in the higher income.
01:24That leads the economy.
01:26But we are still seeing strong spend growth in middle and lower income.
01:30So it is across the board.
01:33But the trend is that the higher income is really doing most of the work there.
01:39Holly, how much are the larger-than-expected tax refunds a lot of Americans are getting,
01:43cushioning their household spending right now?
01:47Sure.
01:48So those tax refunds are higher than they were last year.
01:52And we are seeing that offset the fuel price shock.
01:57So when you look, on average, those refunds can withstand and absorb that shock for about five months.
02:05So we expect that to continue to bolster and support the fuel price increase we're seeing for consumers.
02:12For four or five months, though, then in four or five months, what happens then?
02:16Do you think the households will be under even more pressure?
02:20We could see more pressure.
02:22So we could see some discretionary spending come down.
02:26In March, we saw that services, not gas, actually drove March spending.
02:32That's another really positive sign for the consumer.
02:35So they're not letting the increase in gas prices impact their spend on things like travel and leisure.
02:44Holly, you've got great data on money coming in and out of accounts.
02:48The conversation we have with economists at the moment about the potential for inflation,
02:51the pushback we get is often the labor market isn't tight enough, wages aren't hot enough.
02:56How are you tracking wages and incomes at the moment?
02:59What's that picture evolving?
03:00What's it looking like?
03:02Well, as you know, unemployment still remains in a normalized environment.
03:07So that is a very positive sign for the economy.
03:10We're also seeing wage growth across all higher, middle and lower income cohorts.
03:16The higher income cohorts are seeing stronger wage growth.
03:21So that is a factor here.
03:23But we still see wage growth across all sectors.
03:28What about the credit story, Holly?
03:30What's happening with credit?
03:31You've seen more and more people just make minimum payments on credit cards.
03:34Any pockets of stress that we should be tracking?
03:37I would call it overall a very normalized credit environment.
03:41So it's operating as we would expect within different quality segments of the economy.
03:49So normalized environment, we are still seeing good payoff rates on card.
03:55And so we're still seeing borrowing and spending.
03:59Our loan balances overall were up 4% across all consumer segments year over year.
04:05So that's a sign that clients have access to credit.
04:08They're using it.
04:09But we're still seeing them use it in a very responsible way.
04:13So we're still seeing good payoff rates on a month-over-month basis.
Comments