America's wealthiest households driving nearly half of consumer spending: Moody's
Published On Feb 25, 2025, 6:00 AM
A new report from Moody's Analytics reveals that America's wealthiest households, making over $250,000 annually, contribute nearly 50% of consumer spending. This marks a significant increase from about 36% three decades ago. The spending habits of this demographic significantly influence U.S. GDP growth, with their expenditures rising 12% from September 2023 to September 2024. Conversely, lower- and middle-income households have seen their spending decline due to ongoing inflationary pressures. Moody's chief economist, Mark Zandi, warned that this wealth effect is at risk of reversing because of potential corrections in asset markets due to stretched valuations and economic uncertainties.
Stock Forecasts
SPY
Negative
Given the increased consumer spending from wealthier households, sectors reliant on this demographic may see continued growth. However, the potential for a future correction in the stock market, if economic conditions worsen, poses a risk to companies that heavily depend on high-income consumer spending.
LUX
Positive
The reported increase in consumer spending by affluent households suggests potential growth in luxury goods and high-end discretionary sectors, which may continue to perform well as the upper echelon remains financially secure. Companies linked to these sectors might see stock appreciation despite broader market worries.
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