{"id":33493,"date":"2025-09-28T09:22:00","date_gmt":"2025-09-28T09:22:00","guid":{"rendered":"https:\/\/agooka.com\/news\/usa\/3-reasons-the-us-cant-count-on-wealthy-americans-to-keep-the-economy-going-strong\/"},"modified":"2025-09-28T09:22:00","modified_gmt":"2025-09-28T09:22:00","slug":"3-reasons-the-us-cant-count-on-wealthy-americans-to-keep-the-economy-going-strong","status":"publish","type":"post","link":"https:\/\/agooka.com\/news\/usa\/3-reasons-the-us-cant-count-on-wealthy-americans-to-keep-the-economy-going-strong\/","title":{"rendered":"3 reasons the US can&#8217;t count on wealthy Americans to keep the economy going strong"},"content":{"rendered":"<figure><img decoding=\"async\" src=\"https:\/\/i.insider.com\/68d6d583cc993f9955cf04fd?format=jpeg\" alt=\"Shoppers walking\"\/><figcaption>\n<p>Mike Kemp\/In Pictures via Getty Images<\/p>\n<\/figcaption><\/figure>\n<ul>\n<li>The US may not be able to rely on rich Americans to power the economy, BCA Research said.<\/li>\n<li>High-earning households have been a pillar of consumer strength, propping up growth. <\/li>\n<li>There are three reasons high earners may not provide much more of a boost, BCA said. <\/li>\n<\/ul>\n<p>Rich Americans may not be able to power the economy through a slowdown after all.<\/p>\n<p>A lot of economic punditry recently has been focused on high earners as a pillar of continued consumer strength, with their robust spending helping to prop up economic growth. <\/p>\n<p>But there are a few reasons why that might not be true, analysts at BCA Research said, particularly when surveying other signs of weakness in the economy, <\/p>\n<p>The firm pointed to the slowdown in hiring as a particular area of weakness. <\/p>\n<p>BCA thinks job gains in the economy are now approaching &quot;stall speed,&quot; a level that suggests a slowdown in job creation could lead to a broader economic slowdown.<\/p>\n<p>&quot;&#039;Now that the top 10% of earners account for 50% of consumption, do nonfarm payrolls matter less than they used to? If stocks keep rising, boosting high-end households&#039; wealth and confidence, can they spend enough to carry the economy through a soft patch in the labor market?&#039; Our answer is a carefully considered &#039;no,&#039;&quot; they said.<\/p>\n<p>Here are the reasons BCA isn&#039;t counting on top earners to keep the US economy afloat. <\/p>\n<h2>1. High earners don&#039;t account for as much of spending as some think<\/h2>\n<figure><img decoding=\"async\" src=\"https:\/\/i.insider.com\/68d6d79a1c1f80efbec46aae?format=jpeg\" alt=\"Chart showing share of aggregate consumption by income quintile\"\/><figcaption>High earners don&#039;t account for as much US spending as some believe, BCA Research said.<\/p>\n<p>Consumer Expenditure Survey (BLS), BCA calculations<\/p>\n<\/figcaption><\/figure>\n<p>Data from the Fed&#039;s Survey of Consumer Finances suggests that the top 10% of earners make up around half of all household income in the US, but that doesn&#039;t directly translate into spending, according to BCA&#039;s analysis.<\/p>\n<p>The top 20% of earners in the US have accounted for around 37%-39% of all spending over the last forty years, per BCA&#039;s calculations based on Labor Department data.<\/p>\n<p>&quot;It&#039;s a considerable leap from the top quintile punching above its weight by a roughly two-to-one margin to the top decile consuming five times its income share,&quot; strategists wrote of the discrepancy.<\/p>\n<h2>2. High-earners are also high-savers<\/h2>\n<figure><img decoding=\"async\" src=\"https:\/\/i.insider.com\/68d6dad11c1f80efbec46b58?format=jpeg\" alt=\"Chart showing after-tax income and annual expenditures by income group\"\/><figcaption>\n<p>Bureau of Labor Statistics, Consumer Expenditure Survey<\/p>\n<\/figcaption><\/figure>\n<p>High-earning households accounting for a smaller share of spending appears to be partly driven by the fact that they tend to save more aggressively.<\/p>\n<p>The top 10% of earners in the US saved a proportionately larger share of their income on average in 2023, Labor Department data shows. The bottom 40% of earners, meanwhile, had a negative savings rate.<\/p>\n<h2>3. The wealthy pay large capital gains taxes<\/h2>\n<p>Many high-earning households, whose wealth is distributed across stocks and other assets, also pay tax on realized gains. BCA suggested that&#039;s another reason their share of total spending may be smaller than some think.<\/p>\n<p>&quot;The link between rising stock prices and high-end households spending is intuitively appealing, but it&#039;s challenged by IRS data on capital gains taxes,&quot; the strategists wrote.<\/p>\n<p>&quot;The widely shared conviction that spending by high-end households will overcome labor market weakness is too optimistic,&quot; the firm added, later stating that it believes the risk of a recession is elevated.<\/p>\n<p>Most forecasters on Wall Street don&#039;t expect the economy to slip into a recession this year, but cracks are beginning to show in key areas.<\/p>\n<p>The US added 22,000 jobs in August, far fewer than economists had expected. Job growth for the last two months was also revised downward, while the unemployment rate edged higher.<\/p>\n<p>Consumer spending, though, has held relatively steady, with personal consumption expenditures picking up the pace slightly to 0.6% in August, according to the Commerce Department.<\/p>\n<p>Read the original article on Business Insider<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Mike Kemp\/In Pictures via Getty Images The US may not be able to rely on rich Americans to power the economy, BCA Research said. High-earning households have been a pillar of consumer strength, propping up growth. There are three reasons high earners may not provide much more of a boost, BCA said. Rich Americans may [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":33494,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[],"class_list":{"0":"post-33493","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-usa"},"_links":{"self":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts\/33493","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/comments?post=33493"}],"version-history":[{"count":0,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts\/33493\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/media\/33494"}],"wp:attachment":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/media?parent=33493"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/categories?post=33493"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/tags?post=33493"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}