Despite complaints about high prices and affordability, the economic outlook for 2026 appears strong, with US retail sales data showing the strongest growth since July, driven by a rebound in car buying and holiday shopping.
If Americans are gripped by an affordability crisis, its biggest banks aren't seeing it. Consumer spending is growing, people are saving and investing too, while losses on bad credit cards are falling. It's a puzzle when paired with the poor sentiment reported in surveys and a drumbeat of complaints about high prices, but in the eyes of lenders, at least, the economic outlook for 2026 appears strong.
That was the message in fourth-quarter earnings this week from Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co., and Wells Fargo & Co. Executives at each said households and small businesses remained resilient. All have been watching for deterioration, but they just aren't seeing it.
Jamie Dimon, chief executive officer of JPMorgan, on Tuesday said the next six to 12 months looked pretty positive. "Consumers have money," he said. "There's still jobs, even though it's weakened a little bit. There's a lot of stimulus coming from The One Big Beautiful Bill."
Alastair Borthwick, chief financial officer at Bank of America, on Wednesday added that consumers were "in great shape." The savings rate has started to decline for the economy overall, but Borthwick has seen no signs of people borrowing more and saving less to get by. At the end of 2025, invested assets held by BofA's retail clients were up 16% to about $600 billion, boosted by $19 billion of inflows over the full year.
"Consumers are still spending more and that's consistent with a growing economy," Borthwick added.
This view was backed up by US retail sales data for November, released on Wednesday, which showed the strongest growth since July, driven by a rebound in car buying and holiday shopping.
From a third angle, Wells Fargo CEO Charlie Scharf talked through alternative, early indicators that the bank watches to try and spot trouble brewing. "We look at things like checking accounts with unemployment flows, direct deposit amounts, overdraft activity and payment outflows, and we've not observed meaningful shifts in trends," he said.
So, what's going on? No doubt, there are pockets where affordability is a widespread issue -- housing and healthcare for example. In other areas such as food and gasoline, the effects of past inflation mean prices remain much higher than they were before the Covid pandemic. That has a lingering effect on how people feel about their spending.
At the same time, those on the lowest incomes -- many of whom just aren't served by the biggest banks -- are under real pressure. The share of borrowers nationwide that are more than 90 days late in repaying credit card debt jumped to more than 12% late last year from less than 8% at the end of 2022, according to the Federal Reserve Bank of New York's Consumer Credit Panel. There has been a rise in car loan delinquencies, too.
But this isn't translating into real pain for the big banks. Late payment rates on credit cards aren't getting worse for them, while actual losses on bad debts fell for these lenders over 2025 as a proportion of total balances.
Even at the dedicated card companies such as Capital One Financial Corp. and Synchrony Financial, which are yet to report fourth-quarter numbers, net charge-off rates are forecast to only tick up slightly and to remain significantly below levels at the end of 2024.
President Donald Trump has homed in on big corporations owning rental homes and high interest rates on credit cards as popular-sounding ways to alleviate complaints about affordability. Most of the big banks pushed back strongly against the latter idea. Sure, that's partly because it would severely hurt their profits, but the industry would also likely cut back lending, especially to the riskiest borrowers.
"It would restrict credit to those who need it most and would have a deleterious impact on the economy," said Mark Mason, CFO at Citigroup.
JPMorgan was most forthright about the potential policy -- as speculative and ill-defined as it is -- saying that banks would consider all options to fight it, including lawsuits.
When smaller US banks start reporting later this month, we could see more signs of consumer strain, but it seems unlikely to be deep with unemployment still contained. And while affordability might be a real crisis for some and lingering sticker shock a problem for others, for the banks, American spending looks set to keep driving the economy -- and their profits -- forward.