America’s economy is increasingly divided between two distinct tracks. The top 10% of households—those with annual incomes above $250,000—now account for half of all consumer spending and roughly one-third of GDP, according to Moody’s Analytics.
That level of spending concentration is the highest on record since tracking began in 1989 and is nearly double the share seen in the 1990s, when the highest earners were responsible for about one-third of consumer spending. The result is a set of contradictory economic signals: upscale restaurants and premium events sell out even as credit card delinquencies rise and inflation puts pressure on middle-income households.
“I’m not comfortable with it,” says Mark Zandi, Moody’s chief economist, describing a risky “wealth effect.” Much of the purchasing power among these affluent households comes from gains in home values and investments—especially in technology companies whose AI-driven valuations Zandi describes as “bordering on frothy.” Because this spending is tied to asset prices, it can prove fragile if markets reverse.
The shift in spending power is reshaping industries, which are increasingly tailoring products and services to wealthier customers. Automakers, for example, emphasize higher-margin, expensive SUVs and trucks over more affordable compact models. That focus has contributed to a more than 50% rise in the average price of a new vehicle since 2014, pushing the typical new-car price toward $50,000 and placing new vehicles out of reach for many middle-income buyers.
These structural changes have broader implications for economic resilience and inequality. When consumption is concentrated among a relatively small segment of the population, overall growth becomes more dependent on the financial health of affluent households and the performance of asset markets. Meanwhile, middle- and lower-income families face tighter budgets as essentials and key purchases become pricier or less targeted to their needs.
Policymakers and businesses alike must weigh how this concentration affects demand, labor markets, and financial stability. If high-end asset valuations falter, the resulting pullback in spending by wealthy households could ripple through sectors that have come to rely on them. Conversely, continuing to prioritize premium goods and services may widen economic disparities and limit opportunities for broader-based growth.