The prospect of a spate of white-collar job losses in the U.S. is a growing concern for the CEO of one of the country’s largest credit-card providers.
While U.S. banks have emerged from the early months of the pandemic mostly unscathed, that could change as wealthier borrowers start to lose their jobs, Discover Financial Services Chief Executive Officer Roger Hochschild said. About 898,000 Americans filed for first-time unemployment benefits last week, an unexpected jump from the previous week and the metric’s highest level since August, Labor Department data showed Thursday.
“I’m really worried about unemployment,” Hochschild said in an interview with Bloomberg Television. “I do feel like it’s spreading more toward white-collared jobs. A lot of companies are reacting to the environment and cutting back.”
The biggest U.S. banks announced this week they’d set aside far fewer dollars to cover souring loans in the third quarter than they had in the first six months of the year. And many were heartened by the fact that consumers were keeping up with bills and socking away more money into checking accounts.
“For the consumer, it’s a tale of two cities,” Hochschild said. “For much of our base, the prime consumers, they’re hanging in there.” But, he added, “there are huge segments of the economy that are really struggling.”