Are American consumers actually “resilient“?

A common label gets placed upon American buyers: resilient. Just last week, Marianne Lake, the CEO of Consumer and Community Banking — and a member of the JPMorganChase Operating Committee — affirmed this sentiment.

While she did note some weariness regarding future inflation’s effect on consumers, she reiterated the common adjective: resilient. 

This isn’t the first time, and it won’t be the last. 

Through a myriad of economic conditions, oftentimes spending does not drop unless there is a noticeable recession (see FRED’s Personal Consumption Expenditures data). Despite hiccups, retail spending holds, travel continues, and restaurants stay busy. Even the labor market, though bending at times, usually does not break. 

This resiliency, however, could mean at least two different things. On the one hand, it could signal that households are earning enough money to maintain — or even grow — their standard of living. 

On the other hand, it could signal that they are borrowing to cover growing gaps, taking their falling real income, and kicking the can down the road.

Would you like to take a guess as to which might be happening currently? 

According to the Federal Reserve’s April 2026 Consumer Credit report, outstanding “consumer credit increased at a seasonally adjusted annual rate of 4.8 percent. Revolving credit increased at an annual rate of 10.4 percent, while nonrevolving credit increased at an annual rate of 2.9 percent.” 

It is the revolving credit rate that is most alarming, for that is what contains credit card spending. What this number means is that, if Americans continue their April 2026 spending habits over the next twelve months, their credit card debt will grow by 10.4 percent.  

This marks a big jump in the last few months. February’s rate sat at 0.8 percent (interestingly, the last month before the Iran War started). March saw a jump to 9.4 percent. And this most recent report for April gives us a preliminary rate even higher.  

This, of course, is not surprising. Year-over-year (YoY) inflation for May 2026 came in at 4.25 percent, higher than average hourly earnings YoY for the same month (3.60 percent). 

In real terms, Americans are poorer now than they were a year ago. Yet they have a tool. 

Credit cards offer a frictionless deferment as prices rise more than wages. Revolving credit does not require a new application for each purchase, and it sits ever-so-perfectly in the wallet. 

Price inflation has become an ever-increasing problem, with YoY inflation increasing month after month, almost all year. Should price inflation start to moderate, even that would not offer the necessary relief. 

Remember, unless the rate falls to zero percent, the 4.25 percent rate falling to 2 percent would still mean prices are rising. 

Broadly speaking, groceries, rent, utilities, insurance, and gasoline costs are all much higher than pre-pandemic norms. 

A mere slowing down of growth is not the same as prices going back down. Of course, even this takes for granted a scenario where price inflation does come down soon. In any case, the credit card is clearly facilitating this “resilience” at an increasing rate. 

Today’s “resilience”, however, is destined to become tomorrow’s debt-service burden. Outstanding credit must be paid one day, whether wages eventually catch up to inflation or not.

Credit, but at what cost? 

Here, though, enters another element to this equation. 

Per FRED, the Commercial Bank Interest Rate on Credit Card Plans sits at twenty-one percent.

At lower rates, credit card borrowing can still be expensive. At 21 percent, it is crippling. This is not just shifting of spending from one month to the next as a band-aid, but, in effect, buying time at one of the most expensive prices in consumer finance right now. 

We can now see the insanity of calling these consumers resilient. A household that uses savings or a rising wage to absorb the effects of price inflation is resilient. One that carries a growing credit card balance at 21 percent interest is floundering. 

Now, to be clear, credit card borrowing does not mean every household is in crisis. Some balances are paid off monthly. The aggregate data, however, suggest that more are relying upon credit to maintain spending, which does signal a hole in the resilience narrative. 

Credit cards can help smooth out temporary shocks for households. They cannot, however, turn higher living costs into prosperity. All they can do is shift burdens to a later time. Continually shifting an ever-growing burden does not sound like a healthy economy to me. 

For this reason, one ought not confuse “strong” consumer spending with household strength. Spending can remain high as financial insecurity deepens.  

In our inflationary economy, credit cards have been a safety valve for many. But the pressure released today is only building for tomorrow. This is not resilience; this is not health. This is a ticking time bomb.