"Rich People's Economy" Era? The top 10% of the population in the United States accounts for 49.7% of national total consumption, reaching a historical high!

Wealthy Americans have "smashed" the U.S. economy with their money. According to the latest data analyzed by Moody's, the consumption expenditures of the top 10% of households in the U.S. (with an annual income of about $250,000 or more) now account for 49.7% of total national consumption, reaching a record high since records began in 1989, while thirty years ago, this ratio was only 36%. This also means that the U.S. economy's dependence on high-income group consumption is deepening. According to Mark Zandi, chief economist at Moody's Analytics, the consumption of just the top 10% high-income group contributes nearly one-third of the Gross Domestic Product (GDP): "The financial situation of the wealthy has never been better, their spending has never been stronger, and the economy has never been so reliant on this group." Data shows that this group’s consumption increased by 12% from September 2023 to September 2024, while spending among the middle class and working-class declined, with many Americans forced to cut back due to inflation. Analysts point out that the increase in the consumption capacity of the wealthy is mainly due to the significant growth in asset values such as the stock market and real estate in recent years. Federal Reserve data indicates that since the end of 2019, the net worth of the top 20% income group has increased by over $35 trillion, a growth rate of 45%. In contrast, while the net worth growth rate of the other 80% of the population is similar, the absolute increase is only $14 trillion. However, analysts believe that the economy's excessive reliance on wealthy consumption also brings potential risks. If a stock market decline or falling housing prices affect the confidence of high-income groups, leading them to cut back on spending, it would have a significant impact on the overall economy. Currently, consumer confidence has begun to decline, including among the wealthiest one-third of consumers, partly due to the uncertainty brought by tariff threats. Consumption Polarization Intensifies Concerns About Social Inequality At the same time, the consumption boom among high-income groups stands in stark contrast to the weak consumption of other groups, highlighting the increasing wealth disparity in American society. As inflation hits and prices rise, most Americans have tapped into their extra savings to cope with rising bills. However, those in the top 10% of income have retained most of their savings. According to The Wall Street Journal, over the past four years, the spending of the lowest 80% income group has increased by 25%, just slightly above the 21% rise in U.S. prices. In contrast, the spending of the highest 10% income group has increased by 58%. This means that only the spending of the wealthy has grown significantly above the inflation rate. This huge disparity in consumption capacity is also reflected in the performance of different businesses. According to JPMorgan analyst Matthew Boss, companies targeting high-end customers are performing strongly, while retailers serving the middle and lower-income groups are struggling. For example, Delta Air Lines saw an 8% increase in high-end ticket sales, while economy class ticket revenue only grew by 2%. Royal Caribbean Cruises recently set a record for the best five-week booking period and announced the launch of a European river cruise business targeting high-end customers. Meanwhile, Big Lots has filed for bankruptcy, and Kohl's and Family Dollar are closing stores Risk Warning and Disclaimer The market carries risks, and investment should be approached with caution. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investment based on this is at one's own risk