According to Moody's, about half of all consumer spending is accounted for by the top 10% of incomes, a dynamic that has maintained growth even while lower-income consumers are hit by tariffs and inflation. With recent market fluctuations, the relationship between spending power and market performance has been more apparent.
US equities recovered from Thursday's sharp declines brought on by fresh concerns about private credit on Friday as President Trump allayed fears of a further trade conflict with China.
The gap between high- and low-income households is at its widest point since January 2020,
according to Deborah Weinswig, founder and CEO of Coresight Research, a company that monitors worldwide retail and consumer trends.
“The high-end consumer right now is still very strong and stronger than we would have even expected,” Weinswig said, noting spending among wealthier shoppers has continued to rise through the fall.
At the same time, lower-income households are stretching their budgets by visiting more stores per trip, about five or six now versus three before the pandemic, as they hunt for bargains and stack promotions.