{"id":9838,"date":"2025-02-24T16:25:38","date_gmt":"2025-02-24T08:25:38","guid":{"rendered":"https:\/\/tingchao.xyz\/?p=9838"},"modified":"2025-02-24T16:25:41","modified_gmt":"2025-02-24T08:25:41","slug":"the-u-s-economy-depends-more-than-ever-on-rich-people","status":"publish","type":"post","link":"https:\/\/tingchao.xyz\/?p=9838","title":{"rendered":"The U.S. Economy Depends More Than Ever on Rich People"},"content":{"rendered":"\n
\"\"
The top 10% of earners account for 49.7% of all spending.\u00a9\u00a0Amir Hamja for WSJ<\/figcaption><\/figure>\n\n\n\n

Many Americans are pinching pennies, exhausted by high prices and stubborn inflation<\/a>. The well-off are spending with abandon.<\/p>\n\n\n\n

The top 10% of earners\u2014households making about $250,000 a year or more\u2014are splurging on everything from vacations to designer handbags, buoyed by big gains in stocks, real estate and other assets.<\/p>\n\n\n\n

Those consumers now account for 49.7% of all spending, a record in data going back to 1989, according to an analysis by Moody\u2019s Analytics. Three decades ago, they accounted for about 36%.<\/p>\n\n\n\n

All this means that economic growth is unusually reliant on rich Americans continuing to shell out. Mark Zandi, chief economist at Moody\u2019s Analytics, estimated that spending by the top 10% alone accounted for almost one-third of gross domestic product.<\/p>\n\n\n\n

Between September 2023 and September 2024, the high earners increased their spending by 12%. Spending by working-class and middle-class households, meanwhile, dropped over the same period.<\/p>\n\n\n\n

\u201cThe finances of the well-to-do have never been better, their spending never stronger and the economy never more dependent on that group,\u201d said Zandi, who oversaw the analysis, which was based on data from the Federal Reserve. The analysis runs through the third quarter of 2024 because that is the most recent data available.<\/p>\n\n\n\n

Taken together, well-off people have increased their spending far beyond inflation, while everyone else hasn\u2019t. The bottom 80% of earners spent 25% more than they did four years earlier, barely outpacing price increases of 21% over that period. The top 10% spent 58% more.<\/p>\n\n\n\n

A stock market selloff or decline in home values that rattles the confidence of the top 10% and causes them to cut back would have a significant effect on the economy. Consumer sentiment is starting to slide<\/a> overall, including for the wealthiest third of consumers, thanks in part to tariff threats.<\/p>\n\n\n\n

The buying power of the richest Americans, who Zandi said tend to be older and more educated, stems in part from the swelling values of homes and the stock market over the past several years. While rising asset prices are extolled as a sign of a good economy, they also are widening the gap between those who own property and stocks, and those who don\u2019t.<\/p>\n\n\n\n

Vivek Trivedi, 38 years old, saved up during the pandemic, and in 2022 and 2023 he bought three investment properties in the Indianapolis area, where he lives. His own housing costs are stable because he locked in a sub-3% mortgage on his primary home when he refinanced while interest rates were low during the pandemic.<\/p>\n\n\n\n

He and his wife, Purva Trivedi, both work in the pharmaceutical industry. They earn more than $350,000 a year combined, about 45% more than before the pandemic. They have two small children and support his parents, who live with them.<\/p>\n\n\n\n

\"\"
Purva and Vivek Trivedi locked in a low-rate mortgage during the pandemic.\u00a9\u00a0Kaiti Sullivan for WSJ<\/figcaption><\/figure>\n\n\n\n
\"\"
Even with prices rising, the Trivedis are spending on the things they find important\u2014including cycling.\u00a9\u00a0Kaiti Sullivan for WSJ<\/figcaption><\/figure>\n\n\n\n

\u201cWe\u2019ve made some strategic moves in our own careers and also in investment portfolios,\u201d Vivek Trivedi said. \u201cWe haven\u2019t really had to cut back.\u201d<\/p>\n\n\n\n

Vivek Trivedi took up road cycling and bought a $3,000 bike. The couple noticed their grocery bill rising but agreed that buying organic products was too important to them to give up. This year, they are budgeting about $10,000 to $15,000 for travel, including a potential trip to their native India.<\/p>\n\n\n\n

During the pandemic, Americans across the spectrum saved at record levels. They spent less because they were stuck at home and received extra money from the government\u2019s various stimulus measures. By early 2022, households socked away an extra $2.6 trillion.<\/p>\n\n\n\n

Then inflation struck, and prices rose sharply. Most Americans turned to their extra savings to keep up with their rising bills. But the top 10% of earners kept most of what they had saved up.<\/p>\n\n\n\n

Affluent people also found themselves with assets, such as stocks, that suddenly were worth far more. The net worth of the top 20% of earners has risen by more than $35 trillion, or 45%, since the end of 2019, according to Federal Reserve data. Net worth grew at a similar rate for everyone else, but it translated to a lot less money: an increase of $14 trillion for the bottom 80%.<\/p>\n\n\n\n

Tom Shoaf, a 61-year-old test pilot who lives in Alamogordo, N. M., estimates that his net worth is up about 40% since the pandemic. Nearly all of his assets, from a ranch in Wyoming to the stocks he holds in his retirement accounts, are worth much more now.<\/p>\n\n\n\n

His wife, Kristi Shoaf, is an occupational therapist. Together they earn about $500,000 a year. They recently started giving an annual gift under the gift-tax limit, which is $19,000, to each of their two adult sons. \u201cI had several relatives die during Covid. I thought \u2018Why are we waiting?\u2019\u201d he said.<\/p>\n\n\n\n

The couple have more than $1 million set aside to buy a new home when they retire in a few years. He bought a plane before the pandemic. A rising net worth \u201ccertainly gives you confidence to do more things,\u201d he said.<\/p>\n\n\n\n

\"\"
\u2018I had several relatives die during Covid,\u2019 said Tom Shoaf, here with his wife, Kristi. \u2018I thought \u2018Why are we waiting?\u2019 \u2018\u00a9\u00a0Steel Shoaf<\/figcaption><\/figure>\n\n\n\n

Bank of America found that credit- and debit-card spending by their richest third of customers was growing faster than spending by the lowest-earning third. Certain categories of spending were especially robust. The top 5% of households spent more than 10% more on luxury goods abroad compared with a year earlier.<\/p>\n\n\n\n

\u201cThey\u2019re going to Paris and loading up their suitcases with luxury bags and shoes and clothes,\u201d said David Tinsley, senior economist for the Bank of America Institute.<\/p>\n\n\n\n

Delta Air Lines Chief Executive Ed Bastian last month said<\/a> he expected a strong appetite for high-end travel to fuel profit this year. The airline\u2019s sales of premium tickets rose 8%. Revenue from sales of main cabin tickets rose 2%.<\/p>\n\n\n\n

Royal Caribbean said it had the best five-week booking period in its history in recent months and announced the launch of European river cruises, which are popular with a higher-end set.<\/p>\n\n\n\n

\u201cIt\u2019s an extreme bifurcation\u201d between those companies and others that cater to poorer customers, said JPMorgan Chase analyst Matthew Boss. Big Lots filed for bankruptcy last fall. Kohl\u2019s and Family Dollar are closing stores. \u201cThey\u2019re all battling for fewer dollars,\u201d Boss said.<\/p>\n\n\n\n

Barbara Pierce, 57, runs a membership group, Women With Capital, focused on impact investing and philanthropy. Rising grocery prices have been a topic of discussion even among the wealthy women who participate. Pierce, who lives in Marin County, Calif., has been scaling back on takeout meals because of rising prices: \u201cI don\u2019t want to have a $15 sandwich.\u201d<\/p>\n\n\n\n

\"\"
Barbara Pierce is cutting back on takeout, but a safari to Africa was worth the cost.\u00a9\u00a0BARBARA PIERCE<\/figcaption><\/figure>\n\n\n\n

Pierce and her husband together bring in about $300,000 a year, largely from investment income. The couple and their teenage son went on a three-week safari to Africa in July that cost about $35,000.<\/p>\n\n\n\n

\u201cWe\u2019re spending a lot of money doing things that we really want to be able to do while our son is living at home with us,\u201d Pierce said. \u201cWe feel like the time is now.\u201d<\/p>\n\n\n\n

She is planning to make another big purchase in the next few weeks. Mindful of potential coming tariffs, she wants to replace her 10-year-old car.<\/p>\n","protected":false},"excerpt":{"rendered":"

Many Americans are pinching pennies, exhausted by high prices and stubborn inflation. The well-off are spending with abandon. The top 10% of earners\u2014households making about $250,000 a year or more\u2014are splurging on everything from vacations to designer handbags, buoyed by big gains in stocks, real estate and other assets. Those consumers now account for 49.7% of […]<\/p>\n","protected":false},"author":11,"featured_media":9839,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[12],"tags":[3123,1793,1679],"class_list":["post-9838","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-usa","tag-depends","tag-economy","tag-more"],"yoast_head":"\nThe U.S. Economy Depends More Than Ever on Rich People - LISTEN WORLD<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/tingchao.xyz\/?p=9838\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The U.S. Economy Depends More Than Ever on Rich People - LISTEN WORLD\" \/>\n<meta property=\"og:description\" content=\"Many Americans are pinching pennies, exhausted by high prices and stubborn inflation. The well-off are spending with abandon. The top 10% of earners\u2014households making about $250,000 a year or more\u2014are splurging on everything from vacations to designer handbags, buoyed by big gains in stocks, real estate and other assets. Those consumers now account for 49.7% of […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/tingchao.xyz\/?p=9838\" \/>\n<meta property=\"og:site_name\" content=\"LISTEN WORLD\" \/>\n<meta property=\"article:published_time\" content=\"2025-02-24T08:25:38+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-02-24T08:25:41+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/tingchao.xyz\/wp-content\/uploads\/2025\/02\/1-19.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"768\" \/>\n\t<meta property=\"og:image:height\" content=\"512\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"sddm0805\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebSite\",\"@id\":\"https:\/\/tingchao.xyz\/#website\",\"url\":\"https:\/\/tingchao.xyz\/\",\"name\":\"LISTEN WORLD\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/tingchao.xyz\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/tingchao.xyz\/?p=9838#primaryimage\",\"url\":\"https:\/\/tingchao.xyz\/wp-content\/uploads\/2025\/02\/1-19.jpg\",\"contentUrl\":\"https:\/\/tingchao.xyz\/wp-content\/uploads\/2025\/02\/1-19.jpg\",\"width\":768,\"height\":512},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/tingchao.xyz\/?p=9838#webpage\",\"url\":\"https:\/\/tingchao.xyz\/?p=9838\",\"name\":\"The U.S. Economy Depends More Than Ever on Rich People - LISTEN WORLD\",\"isPartOf\":{\"@id\":\"https:\/\/tingchao.xyz\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/tingchao.xyz\/?p=9838#primaryimage\"},\"datePublished\":\"2025-02-24T08:25:38+00:00\",\"dateModified\":\"2025-02-24T08:25:41+00:00\",\"author\":{\"@id\":\"https:\/\/tingchao.xyz\/#\/schema\/person\/401cf16edf5abe8109bc4f81d40e2298\"},\"breadcrumb\":{\"@id\":\"https:\/\/tingchao.xyz\/?p=9838#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/tingchao.xyz\/?p=9838\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/tingchao.xyz\/?p=9838#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"\u9996\u9875\",\"item\":\"https:\/\/tingchao.xyz\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"The U.S. Economy Depends More Than Ever on Rich People\"}]},{\"@type\":\"Person\",\"@id\":\"https:\/\/tingchao.xyz\/#\/schema\/person\/401cf16edf5abe8109bc4f81d40e2298\",\"name\":\"sddm0805\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/tingchao.xyz\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/b923aee309f3523e57a0208042f74bc6f6899d4ce27b86964e2e49bf87805ff1?s=96&d=wavatar&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/b923aee309f3523e57a0208042f74bc6f6899d4ce27b86964e2e49bf87805ff1?s=96&d=wavatar&r=g\",\"caption\":\"sddm0805\"},\"url\":\"https:\/\/tingchao.xyz\/?author=11\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"The U.S. Economy Depends More Than Ever on Rich People - LISTEN WORLD","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/tingchao.xyz\/?p=9838","og_locale":"en_US","og_type":"article","og_title":"The U.S. Economy Depends More Than Ever on Rich People - LISTEN WORLD","og_description":"Many Americans are pinching pennies, exhausted by high prices and stubborn inflation. The well-off are spending with abandon. The top 10% of earners\u2014households making about $250,000 a year or more\u2014are splurging on everything from vacations to designer handbags, buoyed by big gains in stocks, real estate and other assets. Those consumers now account for 49.7% of […]","og_url":"https:\/\/tingchao.xyz\/?p=9838","og_site_name":"LISTEN WORLD","article_published_time":"2025-02-24T08:25:38+00:00","article_modified_time":"2025-02-24T08:25:41+00:00","og_image":[{"width":768,"height":512,"url":"https:\/\/tingchao.xyz\/wp-content\/uploads\/2025\/02\/1-19.jpg","type":"image\/jpeg"}],"twitter_card":"summary_large_image","twitter_misc":{"Written by":"sddm0805","Est. reading time":"6 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebSite","@id":"https:\/\/tingchao.xyz\/#website","url":"https:\/\/tingchao.xyz\/","name":"LISTEN WORLD","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/tingchao.xyz\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/tingchao.xyz\/?p=9838#primaryimage","url":"https:\/\/tingchao.xyz\/wp-content\/uploads\/2025\/02\/1-19.jpg","contentUrl":"https:\/\/tingchao.xyz\/wp-content\/uploads\/2025\/02\/1-19.jpg","width":768,"height":512},{"@type":"WebPage","@id":"https:\/\/tingchao.xyz\/?p=9838#webpage","url":"https:\/\/tingchao.xyz\/?p=9838","name":"The U.S. Economy Depends More Than Ever on Rich People - LISTEN WORLD","isPartOf":{"@id":"https:\/\/tingchao.xyz\/#website"},"primaryImageOfPage":{"@id":"https:\/\/tingchao.xyz\/?p=9838#primaryimage"},"datePublished":"2025-02-24T08:25:38+00:00","dateModified":"2025-02-24T08:25:41+00:00","author":{"@id":"https:\/\/tingchao.xyz\/#\/schema\/person\/401cf16edf5abe8109bc4f81d40e2298"},"breadcrumb":{"@id":"https:\/\/tingchao.xyz\/?p=9838#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/tingchao.xyz\/?p=9838"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/tingchao.xyz\/?p=9838#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"\u9996\u9875","item":"https:\/\/tingchao.xyz\/"},{"@type":"ListItem","position":2,"name":"The U.S. Economy Depends More Than Ever on Rich People"}]},{"@type":"Person","@id":"https:\/\/tingchao.xyz\/#\/schema\/person\/401cf16edf5abe8109bc4f81d40e2298","name":"sddm0805","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/tingchao.xyz\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/b923aee309f3523e57a0208042f74bc6f6899d4ce27b86964e2e49bf87805ff1?s=96&d=wavatar&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/b923aee309f3523e57a0208042f74bc6f6899d4ce27b86964e2e49bf87805ff1?s=96&d=wavatar&r=g","caption":"sddm0805"},"url":"https:\/\/tingchao.xyz\/?author=11"}]}},"_links":{"self":[{"href":"https:\/\/tingchao.xyz\/index.php?rest_route=\/wp\/v2\/posts\/9838","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tingchao.xyz\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tingchao.xyz\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tingchao.xyz\/index.php?rest_route=\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/tingchao.xyz\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9838"}],"version-history":[{"count":1,"href":"https:\/\/tingchao.xyz\/index.php?rest_route=\/wp\/v2\/posts\/9838\/revisions"}],"predecessor-version":[{"id":9846,"href":"https:\/\/tingchao.xyz\/index.php?rest_route=\/wp\/v2\/posts\/9838\/revisions\/9846"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tingchao.xyz\/index.php?rest_route=\/wp\/v2\/media\/9839"}],"wp:attachment":[{"href":"https:\/\/tingchao.xyz\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9838"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tingchao.xyz\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9838"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tingchao.xyz\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9838"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}