US banks flag risks to consumer spending from tariff uncertainty

Niket Nishant - Reuters - 15/04
U.S. consumer spending has benefited from strong wage growth and low unemployment so far, but it faces huge risks if the upheaval sparked by President Donald Trump's trade policy persists, bank executives warned.
  • Consumers remain largely resilient
  • Labor market strength offers support
  • Recession risks still lingering
April 15 (Reuters) - U.S. consumer spending has benefited from strong wage growth and low unemployment so far, but it faces huge risks if the upheaval sparked by President Donald Trump's trade policy persists, bank executives warned.
While the steep tariffs on the trading partners of the U.S. have raised fears of price hikes, a low unemployment rate of 4.2% and a 3.8% annual wage growth in March are offering some relief.

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"The consumer continues to be resilient and discerning in their spend," Citigroup (C.N), opens new tab Chief Financial Officer Mark Mason told analysts.
The comments mark a rare note of optimism in recent weeks, hinting that a recession can be averted if consumer spending remains at the current level.
"By far the most important variable is unemployment. If the labor market remains very strong, consumer credit will probably be fine," JPMorgan Chase (JPM.N), opens new tab CFO Jeremy Barnum said last week.
Revenue from JPMorgan's consumer and community banking business climbed 4% in the first quarter, while Bank of America (BAC.N), opens new tab fetched 3% higher revenue in its consumer banking unit. The two are the biggest lenders in the United States.
"Our clients continue to show encouraging signs," BofA CFO Alastair Borthwick said on Tuesday. "The signals at this point from the consumer are that ...
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