The ‘Resilient Consumer’ Myth: Credit Props Up Spending

The “resilient consumer” narrative holds that solid employment and spending are enough to sustain the U.S. economy. But consumption accounts for about 70% of U.S. GDP, and if growth is being driven by borrowing rather than income, strong transaction volumes at financial institutions may overstate households’ staying power. Federal Reserve Bank of New York data showed household debt reached $18.8 trillion at the end of March 2026, including $1.25 trillion in credit card balances.

The latest earnings reports appear strong on the surface. On May 5, 2026, PayPal reported first-quarter total payment volume of $464 billion, up 11% year on year, and revenue of $8.353 billion, up 7%. Bank of America said on April 15 that first-quarter client spending rose 5% from a year earlier, while JPMorgan Chase reported on April 14 that card sales increased 9%. Credit and delinquency risks, however, continue to raise questions about whether the momentum can last.