The consumers powering US economic growth are increasingly those who are higher up the income ladder, and likely enjoying a wealth effect from asset-price gains, according to research by Federal Reserve economists.
In the two pre-pandemic years, average household consumption was growing at a similar pace across all income groups, the new Fed study of retail spending shows. But since then, spending patterns have diverged sharply.
In the initial Covid period through mid-2021, low-income households increased spending faster than others with the help of public stimulus programs. But their consumption fell back after the last pandemic checks went out, while ...