The latest signals from Wall Street’s top bankers paint an almost paradoxical picture of the U.S. economy: consumers are spending strongly and paying their bills, even as the job market shows cracks.
Executives from Bank of America, Citigroup, and Wells Fargo reassured investors this week that consumer finances remain robust. Credit performance is “quite good,” delinquencies are stable, and even credit card spending is rising. On paper, this is the kind of resilience that gives bankers confidence, and investors a sense of calm. But here’s the catch: the jobs data isn’t singing the same tune.
According to new figures, the U.S. economy likely created 911,000 fewer jobs in the 12 months through March than previously thought. That’s a flashing warning light that employment growth may have stalled before President Trump’s tariffs fully took hold. So, how do we reconcile these two realities?
There are a few factors keeping households afloat. Stable wages and job security play a big role. While hiring may be slowing, layoffs remain relatively low. That gives many workers the confidence to keep spending. Another key factor is higher-income spending power.
Economists note that most of the spending is being driven by wealthier households. In other words, it’s not a broad-based boom; it’s the affluent cushioning the economy. On top of that, banks are reporting healthy credit card repayments, lower charge-offs, and strong auto finance activity. This suggests consumers are still managing debt responsibly. From a financial system standpoint, that’s reassuring. No major red flags in consumer credit means no immediate risk of a 2008-style banking shock.
Still, the consumer story isn’t as bulletproof as it sounds. Job market anxiety is rising. The New York Fed’s survey shows more Americans are worried about finding work if they lose their jobs. That sentiment alone could cool spending in the months ahead.
Then there’s the issue of spending concentration. If consumer resilience is largely an upper-income phenomenon, what happens if layoffs eventually spread to white-collar or higher-wage jobs? The “resilient consumer” narrative could unravel quickly.
And while banks point to improving delinquency trends, economists like Christopher Hodge note that improvements are minimal. That’s not a glowing endorsement, it’s more like “holding steady.”
The banking sector has every reason to sound optimistic. Strong consumer credit means stable earnings as we head into the Q3 reporting season.
But investors and policymakers should be careful not to mistake resilience for immunity. The U.S. consumer is holding up today but largely because layoffs remain low and higher-income households are carrying the weight of spending. If the job market weakens further, the spending engine could lose steam fast.
This is the economic paradox of 2025: Wall Street sees resilience, while Main Street feels uncertainty. The question isn’t whether consumers are resilient now it’s whether that resilience is sustainable in the face of slower hiring, weaker wage growth, and potential ripple effects from tariffs.
