Key Facts
• Wealthy households now account for 49.2% of US consumer spending (Q2 2025).
• This marks an increase from 48.5% in Q1 2025, the highest since 1989.
• Economic strength is uneven as job growth slows and inflation pressures persist.
• Employment growth for the year ending March 2025 was revised down by 50%.
• Economists warn reliance on wealthy consumers threatens economic sustainability.
• Stock market highs and real estate prices support wealthy spending.
• A potential stock market decline could trigger reduced spending and a recession.
• Federal Reserve expected to cut interest rates by 0.25 points (September 16-17, 2025).
Summary
The US economy is increasingly reliant on spending by the wealthiest 10% of households, which accounted for 49.2% of total consumer spending in Q2 2025, up from 48.5% in Q1. This trend highlights economic imbalances as job growth slows and inflation pressures persist. Revised employment data shows growth for the year ending March 2025 was only half of previous estimates. Economists caution that this reliance on wealthy consumers could undermine economic stability, especially if factors like stock market declines reduce their spending. Asset effects, including high stock and real estate prices, currently support consumption. Meanwhile, concerns about labor market deterioration grow, with the Federal Reserve expected to cut interest rates by 0.25 points during its September 2025 meeting.
