What do bank earnings tell us about the economy?
By Mitchell Hartman
It’s the second week of April, which means spring is in the air and daffodils, cherry trees and lilacs are blooming. Here at Marketplace, it also means earnings season is starting. Corporate profit-and-loss reports for the January-to-March quarter kicked off in earnest Wednesday with Delta Air Lines, which did quite well. Revenue rose 6% and earnings per share nearly doubled from a year ago. ..“Banks really are bellwethers of the economy,” said Karen Petrou, managing partner at Federal Financial Analytics. “Biggest issues for the larger banks: interest rates, which we — at least, I — know are going to be higher for longer. And that helps to improve bank earnings.” That’s because the banks make more money on the interest they charge borrowers. But Petrou said there’s also a downside to interest rates staying high: credit losses. As consumers keep spending, their credit card balances are rising….“We know that the low-wage earners are having difficulty. What we’re looking for now: Has it crept up the wage scale, middle-income wage earners with late payments or delinquencies?” she said.
https://www.marketplace.org/2024/04/11/what-do-bank-earnings-tell-us-about-the-economy/