{"id":2284,"date":"2026-06-26T11:37:40","date_gmt":"2026-06-26T11:37:40","guid":{"rendered":"https:\/\/crosscountrymovingteams.com\/?p=2284"},"modified":"2026-06-26T11:37:40","modified_gmt":"2026-06-26T11:37:40","slug":"the-richest-20-are-the-only-ones-powering-the-u-s-economy-says-top-economist-but-their-prospects-are-entirely-reliant-on-teetering-stock-prices","status":"publish","type":"post","link":"https:\/\/crosscountrymovingteams.com\/?p=2284","title":{"rendered":"The richest 20% are the only ones powering the U.S. economy, says top economist, but their prospects are entirely reliant on teetering stock prices"},"content":{"rendered":"
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In a note shared with Fortune,<\/em> published earlier this week, Zandi wrote households raking in $200,000 or more a year were powering overall spending. In the year ending Q1 2026, outlays by this top fifth percentile grew by 6.5%\u2014or 4% after inflation.<\/p>\n

Read more Merlin the Duck was allowed inside Mexico City\u2019s Azteca Stadium, but only to film a commercial<\/a><\/p>\n

Meanwhile, outlays for the bottom 80% were unchanged once inflation is taken into account, Zandi notes: \u201cThis gap has persisted since the pandemic, which helps explain why most\u00a0Americans are upset\u00a0about their financial situations and the broader economy\u2019s performance.\u201d<\/p>\n

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This might explain the gap between economic data and consumer perception. The U.S. economy is, by many measures, faring pretty well: Unemployment is holding relatively steady, GDP increased at an annual rate of 2.1% in the first quarter of 2026, and while inflation remains elevated, consumers are still spending. <\/p>\n

However, DC\u2019s midterm battle may come down to affordability\u2014a lightning rod as voters continue to push for relief for their wallets.<\/p>\n

\u201cThe K-shaped economy\u2014with the well-to-do thriving and everyone else lagging\u2014remains firmly intact, and there is no sign that the trend line will reverse soon,\u201d Zandi adds. Moody\u2019s analysis of Fed personal finance data shows that, since the pandemic, personal outlay growth for the bottom 80% has been 4.5%, barely ahead of inflation at 3.9%. Meanwhile, the top 20% have increased their spending by 8.3%. <\/p>\n

Balancing a bubble<\/h2>\n

While it\u2019s good news that there is some growth in consumer spending, Zandi is cautious about the extent of the reliance on the wealthy cohort\u2014especially because their wealth is derived from the stock market, where bubble questions are rife.<\/p>\n

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Zandi says a similar phenomenon was observed in the late 1990s: \u201cThis reflects the wealth effect, which holds that changes in household wealth affect consumers\u2019 willingness and ability to spend. If wealth increases, as it has over much of the past decade, consumers spend more of their income and the cash generated from capital gains realizations.\u201d<\/p>\n

Read more Ray Dalio says the U.S. just had its \u2018Suez moment\u2019\u2014and history says what comes next could end an empire<\/a><\/p>\n

The vast majority of these assets are owned by the wealthiest Americans, Zandi adds, citing the Fed\u2019s distributional accounts, which show almost 90% of corporate equities and mutual funds are held by those in the top 20% of the income distribution\u2014 a factor which has become more highly skewed in recent years.<\/p>\n

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Is this a bubble? Zandi writes that elements of the market are \u201covervalued, bordering on speculative,\u201d adding: \u201cGiven how important the well-to-do are to spending and the economy, and the importance of surging stock prices to the well-to-do, it is critical to consider the durability of the runup in stock prices. Based on historically tried-and-true measures of stock market valuation, there are reasons to be nervous.\u201d<\/p>\n

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Price-to-earnings multiples are \u201csending up yellow, if not red, flares,\u201d he writes, given their reading of 19x. \u201cIt would be an overstatement to call the current stock market a bubble, but the warning signs are accumulating,\u201d Zandi notes.<\/p>\n

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\u201cTo be sure, AI stock prices have soared for strong fundamental reasons, as AI promises to be a game-changing technology. But they have also received a big boost from index funds that must buy AI stocks simply because those companies have become a larger share of the index.\u201d<\/p>\n

As such, Zandi suggests consumer spending is far more tenuous than it appears on the surface, and if \u201ceverything sticks to script,\u201d then wealthy consumers and the broader economy will be fine. However, \u201cIt is not hard to envisage an alternative scenario in which the stock market stumbles, prompting this group to become more cautious in their spending and causing the broader economy to struggle.\u201d<\/p>\n

Read more Alan Greenspan said 3 years with Gerald Ford beat 18 at the Fed. His death at 100 raises the question: was he right?<\/a><\/p>\n

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Moody’s chief economist Mark Zandi flags concern that consumer spending relies on the wealthiest, and on bullish sentiment for AI persisting.<\/p>\n","protected":false},"author":1,"featured_media":2283,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[136],"tags":[],"class_list":["post-2284","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-consumer-spending"],"yoast_head":"\nThe richest 20% are the only ones powering the U.S. economy, says top economist, but their prospects are entirely reliant on teetering stock prices - Cross Country Moving Team<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/crosscountrymovingteams.com\/?p=2284\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The richest 20% are the only ones powering the U.S. economy, says top economist, but their prospects are entirely reliant on teetering stock prices - 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