JPMorgan, Wells Fargo, and Citi earnings show consumers holding up despite high rates

Three of America's biggest banks reported third quarter results on Wednesday that signaled fresh evidence that the US economy is holding up despite higher interest rates.

US consumer and business clients remained relatively resilient in the face of higher borrowing costs, with results from JPMorgan Chase ( JPM ), Wells Fargo ( WFC ), and Citigroup ( C ) showing that spending and lending continued to grow from a year ago, while loan losses remained largely contained.

JPMorgan's average credit card loans rose 7% from a year earlier, with card charge-offs falling to 2.91% from 3.15%. Consumer loan balances at Wells Fargo rose 4%, with the credit card charge-off rate falling to 3.73% from 4.02%.

Citigroup reported US card spending rose 11% over the same period, while charge-offs improved to a rate of 3.6%, down from 4.0% a year earlier.

"Our data shows that our consumer and business customers are doing well," Wells Fargo CEO Charlie Scharf said Tuesday. "Consumers are spending more, loan delinquencies are low, and deposit and investment balances have grown."

Scharf said AI infrastructure investment, high employment, and wage growth continue to outweigh the risks from higher rates , oil prices, and inflation.

JPMorgan CEO Jamie Dimon struck a more cautious tone, warning on a call with reporters that another percentage-point rise in interest rates could be particularly painful as borrowers refinance debt at higher costs and credit spreads widen.

Despite relatively healthy consumer credit conditions, Citi and Wells Fargo both increased their total provisions for potential loan losses from the year earlier, while JPMorgan's level rose from the previous quarter.

David Hollerith covers a range of developments throughout the financial sector, from Wall Street to banking and asset management to crypto and fintech. Email him at david.hollerith@yahoofinance.com. Follow him on X at @DsHollers.