The rich are carrying the checkout line
Moody’s Mark Zandi says America’s consumer engine is looking less like a broad-based pickup truck and more like a ride-share with a very expensive back seat. His updated estimate shows the top 20% of households — those earning more than $175,000 a year — now account for nearly 60% of all spending.
That’s not just a trivia-night number. It’s a sign that the economy is being held up by households that are still willing to tap, swipe, and click through higher prices.
Meanwhile, everyone else is getting squeezed
Zandi’s data says spending by the bottom 80% rose just 2.6% over the past year, which means most Americans failed to keep up with inflation. With CPI running at 2.7%, that’s basically a treadmill in dress shoes.
The result is a classic K-shaped setup:
- Higher earners are still spending like the vibe is fine
- Lower- and middle-income households are feeling the pinch
- The gap between those groups keeps widening
Why investors should care
This matters because consumer demand is not one giant bucket. It’s a patchwork of who can still afford a restaurant tab, a new phone, or a vacation without blinking. If spending is increasingly concentrated among richer households, companies serving affluent customers may keep humming while more mass-market names feel the squeeze.
It also tells you something about the durability of the broader market rally. A consumer base powered by the top slice of earners can keep GDP afloat for a while, but it’s not exactly the kind of broad, comfy growth story that makes policymakers break into a smile.
Big picture: the U.S. economy is still spending, but the bill is getting paid by fewer people than before.