Spending climbs among the rich, as everyone else's debt rises, study says
Summary
A report from the Federal Reserve Bank of Boston reveals that wealthy people in the U.S. are spending more, which is keeping the economy steady. In contrast, low- and middle-income individuals are experiencing higher debt and slower spending. This situation could lead to economic difficulties if conditions worsen.Key Facts
- The report used detailed credit card data from the Boston Fed, covering about 80% of card balances in the U.S.
- Spending by high-income earners, those making $120,000 and over, is on the rise.
- Spending by low- and middle-income earners increased sharply in 2021 and 2022 but has slowed since.
- Credit card debt for low- and middle-income groups is above what it was in 2019.
- High-income earners have less credit card debt than they did in 2019.
- Economic shocks like job loss or price hikes could further depress spending among low- and middle-income people.
- In previous years, government support helped lower-income groups pay down debt, but this is no longer the case.
- Future challenges include new laws and tariffs that may affect lower-income earners more.
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