What bank earnings tell us about how consumers are doing amid high inflation, recession worries — ‘It’s not a crack in current numbers’
For all the worries about inflation’s pinch and the chance of a recession, just-released earnings reports from big banks indicate the wallets of many regular Americans are generally holding up as they cope with higher prices — for now.
Stock markets finished Thursday on a rosy note, after starting with a plunge and bouncing with a surge following September inflation data that came in hotter than expected. After JP Morgan third quarter earnings and revenue beat estimates, one analyst on the call asked if there were any “cracks” emerging, including for people in the retail banking business.
At Wells Fargo, CEO Charlie Scharf noted average deposit balances have decreased from the second quarter to the third quarter, but they are still above pre-pandemic levels. There is a segment of customers who are watching their balances “steadily decline” and their balances are now below the pre-pandemic levels, he said.
Challenges lie ahead for the United Kingdom and Europe, said Citi CEO Jane Fraser, speaking hours after U.K. Prime Minister Liz Truss dismissed her chancellor of the exchequer. To be sure, the numbers and takeaways that show up on a big bank’s earnings call are just one glimpse at how people are doing financially. Indeed, inflation rates at a four-decade high have become a key political issue in the midterm elections that are less than a month away.
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