Consumer spending and health has been in focus all year, buffeted by tariffs, inflation, and more. Since consumer spending drives U.S. GDP, it is critical to assess whether that spending is threatened, or if things are moving along.

While soft economic data like Consumer Confidence can help gauge feelings and sentiment, which influence spending, consumer finance companies like American Express (AXP) provide a direct insight into hard factors, like debt levels or credit defaults.

AXP beat 2Q earnings on the top and bottom line. Adjusted earnings per share (EPS) were $4.08 (+17% year-over-year) while revenue was a record $17.86 billion (+9% year-over-year). The company also reaffirmed its guidance for the full year, projecting revenue growth of 8%-10%.

In the quarter, revenue was driven by card fee growth (net card fees jumped 20% to $2.48 billion) and increased spending. CEO Stephen Squeri commented that American Express saw strong demand for premium products, lining up with what we’ve heard from airlines. Cardmember spending rose by 7% in all.

It’s important to note that American Express (AXP) already tends to cater to consumers with higher incomes. The Amex platinum card has a yearly fee of $695. It also charges merchants higher fees than competitors like Visa (V) or MasterCard (MA), boosting the bottom line but also giving it less vendor access. Bankrate writes that these processing fees limit Amex’s reach internationally.

2Q provisions for credit losses were $1.4 billion (+11% year-over-year), which could signal some anxieties. Its net write-off rate was 2% vs 2.1% last year.

Amex is also collecting a younger demographic, growing its market share among Gen Z. Bloomberg wrote in June that Gen Z accounted for around 5% of all U.S. spending on Amex cards. Transaction volume in the group rose by 40% in 1Q.

Of course, younger people typically have less economic stability and a shorter credit history than other generations. If Amex can lock them in for life, great! But if a strong economic pullback hits, how dramatically will younger people change consumption habits? Younger people also have a broader range of financial options, between Buy Now Pay Later services like Affirm (AFRM), digital services like Apple Pay, and other upstarts.

Shares of AXP are set to open higher this morning. The stock is up 6% year-to-date and 26% over the last year. The chart has been coming down off an all-time high of $329.14 on July 3 but had a strong green candle yesterday. With these results, will it continue to climb?

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