“Americans are spending like never before,” boasted the Donald Trump White House in a press release on Wednesday. “Retail sales are booming — up 5% over last year, far outpacing inflation — as Americans spend in record amounts.”
What the press release neglected to mention, however, is that the top 10 percent of American earners were responsible for almost half of consumer spending in the second quarter.
Their record-high 49.2 percent spending share is keeping the economy looking healthy by some metrics. But stepping back, it’s hard to see good health in an economy where job hiring is slowing down, debt delinquencies are on the rise, and luxury spending by a small cohort is so lavish that it artificially obscures the belt-tightening of a vastly larger cohort.
Simply put, the top 10 percent are able to spend so much because they have so much more than everyone else. According to the latest Federal Reserve data, the top 10 percent of US households by wealth control 62.6 percent of all household assets. The top 1 percent alone hold a staggering 28 percent of total wealth.
This concentration becomes even more stark when considering the other end of the distribution. While the wealthiest tenth of Americans owns nearly two-thirds of all assets, the bottom half of households, representing over 160 million Americans, hold just over 5 percent of total wealth.
Consumer spending is no insignificant matter; it accounts for 70 percent of the American economy. In other words, it appears that the main thing keeping Trump’s economy in decent shape at the moment is inequality itself.
When consumer spending is removed from the equation, the state of the American economy under Trump looks much weaker. Last month, the White House declared that “our nation is witnessing an unprecedented surge in manufacturing investments and job creation.” But on closer look, neither claim holds up.
The main thing keeping Trump’s economy in decent shape…
Auteur: Meagan Day
