The economic party rolls on for the rich. For everyone else, not so much
Summary
Spending is growing faster among wealthy Americans compared to those with lower incomes. While higher earners continue to spend and have less debt, lower-income groups face financial stress with stagnant spending and wage growth. This imbalance in spending affects the overall U.S. economy, but wealthy and middle-income spending is helping to keep it stable.Key Facts
- Wealthy Americans increased their spending by nearly 2% in July from last year.
- Middle-income earners saw a spending increase of 1%.
- Lower-income households, earning around $50,000 or less, had no spending growth.
- Wage growth for lower-income groups rose by just 1.3%, compared to 3.2% for higher earners.
- Credit card debt is above pre-pandemic levels for low- and middle-income groups but remains lower for high-income individuals.
- Consumer spending makes up nearly 70% of the U.S. economy's GDP.
- The recent slowdown in spending is more pronounced among lower-income groups.
- The economy remains stable overall due to ongoing spending by wealthier and middle-income households.
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