American Express Chief Executive Kenneth Chenault says he has seen signs of stabilization in the economy, but there have not been any signs of improvement yet.
He adds, he is hopeful for a recovery by the second half of 2010, but that is not how he is planning the company's
business.
"I think it is way too early to say that we're in an economic recovery," Chenault says, in an interview with CNBC. "I think what is important is that at least what we are seeing is some stabilization. If we think about where things were last fall with the credit markets seizing up, it was a frightening situation. So stability, I think is important, and I think that's been very helpful."
One sign he points to that "potentially could lead to some green shoots" is the stabilization in card billings that has occurred over the past few months. This measure remains down by a double-digit percentage rate from earlier periods, but has leveled off at that rate of decline. Chenault says he'll be encouraged when he starts to see an increase in card billings.
According to Chenault, the downturn in housing has sparked significant changes in consumer behavior that will be around for a while.
"I think one of the permanent changes that we are going to see is that people in the United States will save more and I think that is constructive. I think what's happening is that we are seeing is a rebalancing of the household balance sheet, and I think that will create a foundation so that we can then return to some spending growth."
American Express's core consumer, who is more affluent than the average American, also has been significantly shaped by the recent downturn, he says.
"The impact on the high-end, affluent spender has been substantial, so clearly, discretionary spending has been impacted, but also non-descretionary spending has also been impacted," he says.
Even, so there is room for American Express to expand its market share, Chenault says. He is looking at co-branded cards, but wants to stick with those that are aimed at affluent, credit-worthy consumers.
As for recent legislation aimed at reforming the credit card industry, Chenault said the industry needed more disclosure and transparency, but the new rules "went too far" in some areas.
One example he cites was the more limited opportunities to dynamically price.
"Risk-based pricing is important," he says. "If someone's financial situation changes dramatically and you don't have the flexibility to price, what's going to happen: the very people who need credit will not be able to obtain it at the same level and it will be very expensive."
He urged lawmakers not to stifle consumers when crafting these reforms because rebuilding consumer confidence and creating jobs are going to be key to the economy's rebound.