Executive Summary:
A new report from Moody’s Analytics reveals that the wealthiest 10% of U.S. households now account for nearly 50% of all consumer spending, the highest level recorded since 1989. This trend underscores an increasing economic divide, as high-income earners boost luxury spending while middle- and lower-income households cut back.
Key findings include:
- Wealthiest Americans Power Consumer Spending: The top 10% of earners, making $250,000+ annually, now contribute 49.7% of all consumer expenditures, up from 36% three decades ago.
- Luxury Spending on the Rise: High earners increased spending by 12% year-over-year, splurging on luxury goods, first-class travel, and expensive vacations, while middle- and lower-income groups reduced spending.
- Economic Dependence on the Rich: The top 10% spent 58% more than they did four years ago, while the bottom 80% barely kept pace with inflation, increasing spending by only 25%.
- Potential Economic Risks: The U.S. economy is now more dependent than ever on the wealthiest households, making it vulnerable to stock market corrections, tariff tensions, or economic downturns that could impact high-net-worth consumers’ spending habits.
The growing disparity between wealthy consumers driving economic growth and struggling middle- and lower-income Americans raises concerns about long-term economic stability, as businesses catering to lower-income shoppers—such as Big Lots and Kohl’s—struggle while luxury brands thrive.
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