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The highest-earning 10% of Americans are powering the economy at the highest levels since the 1990s, according to new data.
While most people are saddled by inflation, debt, and stagnating wages, those making more than $250,000 are spending like there’s no tomorrow, according to data from Moody’s Analytics reported by the Wall Street Journal.
The top 10% of earners are now responsible for 49.7% of all spending nationwide, a record. Thirty years ago, they made up about 36% of all spending.
Moody’s estimates the top 10% account for a whopping one third of the country’s GDP, as spending by working-class and middle-class households is dropping.
“The finances of the well-to-do have never been better, their spending never stronger and the economy never more dependent on that group,” Mark Zandi, the chief economist at Moody’s, told The Journal.
Wealthy people’s spending has far outpaced inflation, while the bottom 80% of earners are spending 25% more than they did four years ago, which isn’t much when you factor in the 21% price increase, Moody’s found.
Bank of America (BAC+0.17%) found similar data. The richest third of people are increasing their spending at much higher rates than the lowest third, and they’re often splurging on luxury items.
“They’re going to Paris and loading up their suitcases with luxury bags and shoes and clothes,” David Tinsley, senior economist for the Bank of America Institute, told The Journal.