As consumer delinquencies rise, U.S. economic growth increasingly powered by the wealthy
Most official data continues to show the U.S. economy is humming along, with unemployment historically low and inflation expectations still relatively stable.
Most official data continues to show the U.S. economy is humming along, with unemployment historically low and inflation expectations still relatively stable.
Yet under the hood, a wealth divide that had subsided somewhat in the early stages of the pandemic era has suddenly grown more stark: The upper echelons of America’s income distribution — those making roughly $153,000 in annual income — are the ones that are now powering much of the spending driving U.S. growth.
Meanwhile, Americans who are not at the top are facing increasing financial difficulties.
The upshot is that the U.S. economy may be exposed to a more acute downturn if prices of the most highly valued assets, like stocks, homes and cryptocurrencies, take a turn for the worse.
“The fact that consumer spending is so concentrated among folks who are well-to-do makes the economy vulnerable,” said Mark Zandi, chief economist of Moody’s Analytics.
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