Affirm CEO says furloughed federal employees are starting to lose interest in shopping

In a recent discussion, Max Levchin, the CEO of Affirm, highlighted emerging trends in consumer behavior as a result of the ongoing federal government shutdown. While the buy now, pay later platform has yet to experience significant credit distress among its federal employee borrowers, Levchin noted a subtle decline in shopping enthusiasm among this group. Approximately 670,000 federal employees have been furloughed, with an additional 730,000 working without pay, as reported by the Bipartisan Policy Center. "We're observing a slight decrease in shopping interest within that demographic, along with a few basis points of change," Levchin stated during an interview on CNBC's "Squawk on the Street." The shutdown, which began on October 1, marks the longest in U.S. history, affecting not only federal workers but also programs like SNAP, which provides food assistance to 42 million Americans. Despite these challenges, Levchin remains vigilant, monitoring employment statistics for any signs of broader economic disruption. He reassured investors that Affirm is prepared to adjust its credit standards as the situation evolves, stating, "At the moment, everything appears stable; we’re not witnessing any significant disturbances." In light of recent developments, Affirm released its fiscal first-quarter earnings report, which exceeded Wall Street expectations. The company reported earnings of 23 cents per share on $933 million in revenue, outperforming analyst predictions of 11 cents per share on $883 million in sales. This represents a remarkable 34% revenue increase from the previous year, while gross merchandise volume surged by 42%, rising to $10.8 billion from $7.6 billion. Affirm has revised its full-year projections, now anticipating gross merchandise volume to reach $47.5 billion, an increase from the prior estimate of $46 billion. Furthermore, the company has renewed its partnership with Amazon, extending through 2031, and secured agreements with other major players like Shopify and Apple, despite a recent shift where Walmart opted for competitor Klarna. Levchin pointed out that certain sectors, including travel and ticketing, have seen increased consumer interest, indicating resilience in shopping behavior. Affirm’s active consumer base grew to 24.1 million, up from 19.5 million a year earlier. "Every day, we advocate for buy now, pay later as a superior purchasing method, and consumers are clearly responding positively," he concluded.