If America’s economy has a prosperous holiday season, the data suggests, we’ll have rich folks to thank.
The top 10% of earners now account for roughly half of all consumer spending, according to a report by Moody’s Analytics. That’s a historic high.
America’s economic growth increasingly relies on the well-paid. They accounted for 49.2% of spending in the second quarter of 2025. By comparison, top earners represented about 46% of spending at the same time in 2023, and about 43% in 2020.
“Their financial situation is about as good as it’s ever been,” said Mark Zandi, chief economist at Moody’s.
For less wealthy Americans, consumer spending is comparatively flat. Middle-income earners, those in the 40th to 60th percentile by income, spent about $2.1 trillion in the second quarter of 2025, scarcely more than they spent in those months of 2023 and 2024.
Consumer confidence stands at its lowest ebb since June 2022, the peak of the COVID-19 inflation crisis, according to University of Michigan survey data.
The economic divide that separates upper-income Americans from everyone else has spawned talk of a K-shaped economy, with one trend line pointing up, another heading down.
Top earners are powering consumer spending in America.
Rising stock prices and home values have insulated top earners from a cash crunch that has afflicted the less affluent.
Consumer prices have risen by about 25% since 2020, federal data shows. Most wealthy Americans can easily cover that spread with their stock earnings, high income and comparatively ample savings.
“Their wealth is growing,” said Taylor Jo Isenberg, executive director of the Economic Security Project, a non-profit advocacy group for lower-income households. “So, they’re spending, while millions of Americans who are in a very different situation are riding out an affordability crisis.”
Lower- and middle-income consumers face a cash crunch.
Not surprisingly, retailers and analysts are hanging their hopes on high earners to deliver sales in the forthcoming holiday season.
“Upper-income shoppers likely will account for a disproportionate share of holiday sales and the bulk of this year’s growth from the 2024 shopping season,” said Jennifer Timmerman, senior investment strategy analyst at Wells Fargo Investment Institute, in a Black Friday analysis on Nov. 24.
Lower- and middle-income shoppers, Timmerman said, will be hunting for discounts and leaning on buy now, pay later financing to get through the holidays.
Economists cite two overarching factors in the rising fortunes of upper-income Americans: Stocks and homes.
“The AI boom has sent the stock prices of AI companies skyward, and those companies are owned by households in the top 10% in the income and wealth distribution,” Zandi said. The top 10% of households earned $251,000 or more in 2024, according to the U.S. Census.
The S&P 500 has risen by 261% in the past decade, according to an August report from The Motley Fool.
That runup has mostly benefitted the rich. The top 1% of wealthy Americans own half of all stock, federal data shows.
“Their sense of how the economy is doing is based on the stock market,” Sweet said. “And when people are generally feeling better, they’ll go and spend a little bit more.”
The typical stockholder in the top 10% by income owned $1.1 million in stock in the third quarter of 2025, up from $624,000 at the end of 2022, according to the University of Michigan survey.
Among high earners, 63% who own stocks expect the market to rise in the year ahead, the survey found.
The other big driver of upper-income prosperity is real estate. And the average home sale price rose 41% to $525,100 between the second quarter of 2020 and the same time in 2022, federal data shows.
Ninety percent of top-earning Americans own homes, in contrast to an overall homeownership rate around 66%, according to the 2022 federal Survey of Consumer Finances.
Many high-income homeowners benefit from low borrowing costs. Interest rates on 30-year mortgages hovered around 3% in the peak pandemic years. Millions of homeowners refinanced at historically low rates.
“If they have a mortgage, they got it back when rates were low,” Zandi said. Today, “they’re getting more on their money market account than they’re paying in interest on their mortgage.”
Thanks to surging stocks and soaring home values, high-income Americans have powered consumer spending in the 2020s. Overall spending rose from $14.5 trillion in August 2020 to $21.1 trillion in August 2025, federal data shows.
But if affluent Americans stop spending, the economy could falter.
Job seekers inquire about jobs at the MasTec company booth during the Mega JobNewsUSA South Florida Job Fair held in the Amerant Bank Arena on September 25, 2025 in Sunrise, Florida.
For top earners to remain so, they must stay employed. The U.S. unemployment rate stands at 4.4%, as of September, its highest point since 2021.
“If the labor market begins to unravel, that’s going to hit confidence up and down the income distribution,” said Ryan Sweet, chief U.S. economist at Oxford Economics.
Affluent Americans are also particularly sensitive to stocks, a notoriously mercurial group of assets.
“If stock prices were to fall in a meaningful way and stay down, that would weigh on their spending,” Zandi said. “This group is driving the economic train with their spending. If they pull back, they’ll take the economy with them.”
