The Washington Post in a June 27 article reported that at this point in the 70%-consumer-spending U.S. economy, 40% of consumer spending is coming from households making more than $120,000/year. During a pandemic-driven economic collapse that took blue-collar workers’ hours and wages and retail workers’ jobs, Americans as a whole were nonetheless able to save $2.5 trillion more than in any recent year. Because of the Treasury’s stimulus payments, but much more because of the Federal Reserve’s curated stock market boom, the wealthiest 10% of American households added more than $8 trillion to their net worth during 12 months of pandemic (March 2020-March 2021), according to the Federal Reserve itself.
High-income consumer spending is now up 11% from pre-COVID levels, growing at the fastest pace since 1946. The Post quotes a Harvard “inequality economist": “Higher-income folks are accumulating a lot of savings. They will spend more going forward, and that will further create an incentive for companies to cater to higher-income folks even more.”
That the central banks are the driver of this, is emphasized by Bank of America economists in a report described by ZeroHedge. It says central banks have bought $900 million of financial assets per hour for 15 months straight, causing “epic gains in stocks and commodities in the past 15 months relative to 100 years of history.” Global stock market “capitalization” (i.e., stock price) has risen by $54 trillion in that time.
