High-income consumers are fueling U.S. growth, with the top 10% now responsible for nearly half of all spending—a record that highlights both economic resilience and growing dependence on the wealthy, Bloomberg reports.
Moody’s Analytics reports that affluent households accounted for 49.2% of consumer spending in the second quarter, the highest share since tracking began in 1989. Their spending, supported by strong stock markets and elevated property values, is masking weakness elsewhere as middle- and lower-income households struggle to keep pace with inflation.
Retail sales rose in August for the third straight month, beating forecasts, but economists caution the imbalance leaves the economy vulnerable. A pullback by wealthy consumers could quickly tip the nation into recession.
Meanwhile, revisions show U.S. job growth has been far weaker than previously reported, and rising delinquencies are fueling concern. The Federal Reserve is widely expected to respond by cutting interest rates this week.
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