Wells Fargo and Citi Customers Are Still Spending

If everyone feels so miserable, why do they seem to be out having a good time? This is the puzzle in comparing US second-quarter bank results with terrible readings in recent consumer sentiment surveys.

Citigroup Inc.’s customers are spending freely on restaurants and holidays, which drove credit card volumes up 18% compared with those in the period a year earlier, the bank said in its results Friday. Wells Fargo & Co. similarly called out travel and entertainment in the spending growth on cards in its results. JPMorgan Chase & Co. said much the same the day before.

Some discretionary spending is down: Wells Fargo said debit card holders were buying fewer clothes and doing less home improvement. High inflation is also a factor, Mark Mason, Citigroup’s chief financial officer, noted. Things like fuel and flights just cost more. But as Mason said, the feel-good leisure spending is hard to square with worries about rising costs of living and the sharp declines in consumer expectations about income and employment in Conference Board surveys this year.