American Express, which in recent years has been reining in costs to counter sluggish revenue growth, said expenses rose 3.5 percent to $3.60 billion in the fourth quarter, driven mainly by marketing costs and salaries. American Express Co will cut more than 4,000 jobs this year, an executive said, after the credit card company also reported higher quarterly expenses and provisions for bad loans.
In the U.S., jobs paying between $14 and $21 per hour made up about 60% those lost during the recession, but such mid-wage jobs have comprised only about 27% of jobs gained during the recovery through mid-2012. In contrast, lower-paying jobs constituted about 58% of the jobs regained.
In fact, American Express notes that its capability as a closed-loop network, where its success is principally driven by what its customers spend on their cards -- and which it calls a "spend-centric business model" -- is one of its most essential competitive advantages. The broader reality -- that the highest quality customers are spending more and more on their cards each month -- will only be a good thing for American Express.
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