Tremendous Resilience

Consumers are highly employed, have a lot of savings, and are continuing to spend

Summary: The US economy is showing tremendous resilience despite all the concerns about tariffs. Consumers are highly employed and have a lot of savings, and so they are continuing to spend. Capital markets activity is showing signs of healing and AI infrastructure spend is full speed ahead. Other interesting notes: Jensen Huang is ringing alarm bells about Chinese competitiveness in AI. Comments from Boeing's customers suggest that they may have turned a corner.

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Macro

The economy is showing tremendous resilience
"The U.S. economy and the U.S. consumer is showing tremendous resilience. Somewhat surprising to me, but I think you have to say the resilience in the economy is pretty pronounced. We still have a significant fiscal impulse. We still have very strong employment. We're moving, as we said, towards more manageable tariff levels. I think that all likely leads to economic growth. I think we're likely to avoid a recession with this baseline set of facts, but the volatility remains, and so it's still a little bit uncertain." – Goldman Sachs (GS 0.00%↑) COO John Waldron

Consumers continue to spend
"Last time that we all spoke was at our earnings call, we had the first quarter data, and we had up until the 28th of April, and spending trends were stable at the time. Now if you include the first 3 weeks of May, we see exactly the same. So spending trends have largely been the same. Now if you look at this a little bit closer, and then you'd say, why is that? If you look at the headlines, if you look at the sentiment surveys, and we've just seen one yesterday, I was surprisingly positive. So, you see a lot of rhetoric there and you see a lot of headlines and it hasn't really translated into consumer behavior." – Mastercard (MA 0.00%↑) CEO Michael Miebach

"Payments volume data primarily has remained in line with what we're seeing in April, what we saw in the month of April, which means for the quarter, it's actually tracking a little bit better than Q2, again reflecting the resilience in consumer. So that's the U.S." – Visa (V 0.00%↑) CFO Christopher Suh

"It's been consistent, right? It's really been consistent. What we've seen through May is what we saw through April and what we saw in March and in the first quarter. And so, goods and services consistent. Airline pretty consistent and we said that was down a little bit. I think lodging gets a little more challenged, but restaurants still very, very strong. And if you look at the individual segments international, SME and U.S. consumer pretty consistent to where they are. So, unless something crazy happens in June, I think when we start talking about this in July, we're going to say, the second quarter pretty much looked just like the first quarter did, FX adjusted and all that other kind of stuff." – American Express (AXP 0.00%↑) CEO Steve Squeri

Employment is still high
"We still see a fairly normal environment for us, which we think is good. And again, it goes back to consumers are still working, unemployment hasn't gone up. That part is quite strong." – Equifax (EFX 0.00%↑) CEO Mark W. Begor

"The underlying support of the labor market continues to be there. We see a low unemployment. And we have wage growth that is kind of keeping up with inflation above inflation. So purchasing power is solid, which are both key drivers. So, that's fundamentally the picture that we've seen and that's why we said what we said in terms of our outlook for the year in the earnings call." – Mastercard (MA 0.00%↑) CEO Michael Miebach

"But look, the consumer is still highly employed. There's a reasonable level of new job creation. Inflation is in decent shape, although not back to the 2% long-term aspiration. The cost of credit is a little bit elevated from where it was at the end of the prior administration, but not that much. And also, I think consumers have become more habituated to paying a little bit higher prices for their borrowings than during the COVID era with all the 0 interest rates all of that. And so -- and delinquencies seem to be reasonably controlled." – TransUnion (TRU 0.00%↑) CEO Christopher Cartwright

And savings are robust
"Our consumers are very, very healthy. They have an average FICO score of 790 at booking. They frankly have a lot of wealth. We have $61 billion of AUM in our wealth business. They have 20 -- this is an interesting statistic just to show you the long tail of COVID, the noninterest-bearing accounts for our retail customers are 26% above today where they were pre-COVID. And they're spending they're spending in line with how they've been spending." – KeyCorp (KEY 0.00%↑) President Christopher Gorman

"When you look at it in the aggregate, about $1.7 trillion has moved from our consumer accounts into the economy year-to-date through May 15th or so. That's up about 6% from last year. That's a faster rate of growth than the fourth quarter of last year and the fourth quarter of the prior year. So it's accelerating during the year. And, you know, it's not people getting ahead of the tariffs — this is going all over the economy. And that's because people are in relatively good shape...The answer is: the consumers are spending money. That means the US economy has an anchor to windward that very few economies have, because that huge consumer base spends. And our customer base supports that across the board." – Bank of America (BAC 0.00%↑) CEO Brian Moynihan

Consumers are worried but spending anyways
"I think that look consumer sentiment is in the toilet but yet they're just complaining as they go spend. That's what we're seeing." – American Express (AXP 0.00%↑) CEO Steve Squeri

"I would say the consumer is healthy in all the various measures and metrics kind of support that. But I also would say the consumer is very worried, right? There's a lot of concerns about what's to come." – TransUnion (TRU 0.00%↑) CEO Christopher Cartwright

Consumer confidence is rebounding, though
"We've now had 5 consecutive months of consumer confidence degradation in the U.S. Yesterday, we had a surprisingly positive rebound of consumer confidence. Conference Board reported something like a 12-point bump. So maybe that's headed the right way. Unemployment is still very, very low, and your guess is good to mine as what's going to happen with interest rates, but I think probably likely to continue to be supportive. So yes, I think there's reasons to be optimistic." – Envista (NVST 0.00%↑) SVP Paul Keel

People are worried about budget deficits
"I think the attention rightly is shifting, certainly in the bond market to the U.S. budget debate and the fiscal picture, which I would characterize as somewhat concerning...I think the big risk is long run rates continuing to back up and the cost of capital in the economy rising and fundamentally, that becoming more of a break on economic growth as opposed to an accelerated economic growth." – Goldman Sachs (GS 0.00%↑) COO John Waldron

Meanwhile, US-China talks have stalled
"I would say that they are a bit stalled. I believe that we will be having more talks with them in the next few weeks. And I believe we may, at some point, have a call between the President and Party Chair Xi...I think that given the magnitude of the talks, given the complexity, this is going to require both leaders to weigh in with each other. They have a very good relationship, and I am confident that the Chinese will come to the table when President Trump makes his preferences known." – Treasury Secretary Scott Bessent

But people are also starting to ignore political noise
"I think people are starting to get used to that a little bit just because there's a tariff in there, it doesn't mean it's going to stay for a long period of time. Obviously, a little bit of more certainty on that would help right now, but I think we're starting to work through that already that a lot of these tariffs are just more rhetoric than actual." – ONEOK (OKE 0.00%↑) SVP Sheridan Swords

International