Affluent Americans say the economy is just fine — and they’re spending like it is, too. Meanwhile, lower-income consumers are feeling the brunt of a slowdown.
Deteriorating economic sentiment and activity among poorer Americans suggest the economy is at a turning point, even if it doesn’t show up in headline data, since higher-income consumers make up a disproportionate share of aggregate spending.
The share of consumers surveyed by the University of Michigan who volunteered that high prices were eroding their living standards in early July matched a peak first reached two years ago when inflation was at multidecade highs.
“The lower income consumer is in their own personal recession unfortunately,” Peter Boockvar, chief investment officer at the investment firm Bleakley Financial Group, wrote in a note.
The latest University of Michigan report shows that economic concerns are more prominent among poorer consumers than rich ones.
“Despite expecting inflation to ease, consumers remain vociferously frustrated at the persistence of high prices,” the survey’s director Joanne Hsu wrote in a note.
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