Over the past few years, I have fielded versions of the same question from readers again and again
A recent analysis of consumer spending from Moody’s Analytics, first covered in the Wall Street Journal,
https://englundmacro.blogspot.com/2025/02/two-americas-nollrantans-vinnare.html
provides an answer: Rich people really are just firing a cash cannon into the consumer market.
The wealthiest 10% of American households—those making more than $250,000 a year, roughly—are now responsible for half of all US consumer spending and at least a third of the country’s gross domestic product.
If you keep that in mind, a lot of strange things start to make more sense—sometimes distressingly so.
That high earners spend disproportionately large amounts of money on discretionary purchases is not a new phenomenon. But the disconnect between this group’s buying habits and those of the rest of the country has become more extreme in recent years.
Bloomberg 28 februari 2025
https://www.bloomberg.com/news/articles/2025-02-28/wealthy-americans-fuel-half-of-us-economy-consumer-spending
Slumping Stocks Threaten a Pillar of the Economy: Spending by the Wealthy
There’s an old Wall Street saying that “the stock market is not the economy.”
That’s usually true. But, in this economic cycle, stock market gains have become an increasingly important driver of consumer spending, helping to fuel growth as other areas of the economy cool.
The value of stocks and mutual fund shares on the balance sheets of American households increased by $10 trillion, or 28.8%, to $46.6 trillion over the 12 months to September 2024
Moreover, ownership of financial assets in the US is heavily concentrated among the rich. About 87% of those stock and mutual fund shares are in the hands of the richest 10% of households.
A stock market decline of 20% or more — perhaps tied to a shift in investor sentiment around artificial intelligence — would erode the spending power of wealthy Americans.
That may be enough to cause a consumption recession
MarketWatch 3 mars 2025
Why the bulls are running and the consumers are buying
Consumes and investors feel rich because they are rich.
Demokraterna måste bli mer än ett parti för en högutbildad elit om de ska kunna bli relevanta i amerikansk politik igen.
Janerik Larsson SvD 1 mars 2025
Tillbaka till Rolfs länktips 3 mars 2025
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