By Telis Demos

American Express's spenders were busy at the end of last year, even spending more on first-class air travel. Can they really keep flying high?

Shares of Amex were dinged in the fall when the card giant reported a bit of a slowdown in year-over-year spending growth. The firm's affluent, and increasingly younger, consumer base had been flashing their plastic ( and metal) like mad for a couple of years. While the slowdown seemed inevitable, it appeared to catch the market off guard.

And it raised thorny questions about the U.S. economy more broadly. With the stock market doing as well as it has been, and the job market looking strong, what is holding spenders back?

The company's fourth-quarter report provided some reassurance, or at least appeared to. Total billed business -- a measure of card spending -- jumped 8% from a year earlier in the fourth quarter, faster than the 6% growth rate of the prior two quarters. U.S. consumers led the way, with 9% growth, spearheaded by 16% growth among Gen Z and millennial cardholders. Those figures are adjusted for currency fluctuations.

Even small and medium-size businesses contributed, growing their spending 3% in the fourth quarter faster than their 1% pace in the prior quarter.

But the market is still in question mode and seems to want more clarity about 2025. With all the uncertainty swirling around tariffs, interest rates and immigration, that is understandable.

Shares of Amex were down about 3% midday Friday. The stock is lagging behind the banking sector overall over the past month, which is unusual.

The company had mostly upbeat commentary. Amex executives told analysts that the initial weeks of January were more in line with the fourth quarter's accelerated pace than the slower pace of the first part of 2024. Their guidance was for revenue growth in 2025 to be in a range of 8% to 10%, inclusive of its long-term aim of 10% annual growth.

"If, in fact, billings are like they were in the fourth quarter, you will see us at the top end of the revenue range," Amex Chief Executive Stephen Squeri told analysts on Friday morning.

So Amex isn't sounding the alarm about American spenders. In fact, Squeri noted that "front of cabin" travel spending -- that is, first-class or business-class airline tickets -- was up 19% quarter-over-quarter in the fourth quarter. But investors seem to be preparing for turbulence anyway.

Write to Telis Demos at Telis.Demos@wsj.com

(END) Dow Jones Newswires

January 24, 2025 13:21 ET (18:21 GMT)

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