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Yesterday, the New York Fed released its monthly Survey of Consumer Expectations. The number that jumped off the page: 13.3% of American households say they are “much worse off” than they were a year ago. That’s the highest reading since July 2022 — when gas hit $5 a gallon and inflation was running at 9%.
But here’s what most people miss about this economy. GDP is growing. The stock market just came off a nine-week winning streak. Payrolls last Friday beat expectations by a mile — 172,000 jobs added. If you only look at those numbers, everything is great.
The chart above tells you why that picture is misleading. In 1990, the top 10% of earners — households making $250,000 or more — accounted for about 36% of all consumer spending. Today, that share has crossed 50%. Half of all spending in the largest consumer economy on Earth is driven by one-tenth of its households.
For everyone else, spending has barely kept up with rising prices. Middle-income earners — the 40th to 60th percentile — spent about $2.1 trillion in Q2 of 2025. That’s roughly the same as they spent in 2023 and 2024. Meanwhile, the top 10% increased their spending by 12% in a single year. Stocks up. Home values up. Locked-in 3% mortgages from the pandemic years still padding the monthly budget.
That means the entire economy now rests on whether the wealthiest Americans keep spending. One bad quarter in the stock market... one serious correction... and you don’t just lose a few luxury handbag sales. You lose a third of GDP.
We used to call it the middle-class economy. Look at the chart again. It hasn’t been that for a long time.
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