US economy depending on the wealthy more than ever: Report

• A new report shows the wealthiest 10% of Americans are keeping the U.S. economy going right now, accounting for nearly half of all consumer spending. Meanwhile, working- and middle-class Americans have had to cut down on spending.
• The wealthiest 10% make $250,000 or more each year.
• Federal Reserve data shows credit card delinquency among non-wealthy Americans is the highest it’s been since 2011.

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America’s economy is doing well right now – unemployment is historically low, and inflation has mostly stabilized. However, that positive outlook can be a bit deceiving.

What’s really going on?

New data from Moody’s Analytics shows it’s the top 10% keeping the U.S. economy afloat, according to a Wall Street Journal report.

Meanwhile, those in the lower income brackets making $73,000 or less per year in household income are struggling more than they have since 2011.

Moody’s chief economist said they’ve had to turn to credit cards to maintain purchasing power. Federal Reserve data shows that’s not going so well.

What does the Fed say?

According to the New York Federal Reserve, credit card delinquency is the highest it’s been in more than a decade at 11%. That means 11% of people are 90 days or more overdue on paying their bills.

That’s even higher than the delinquency rate was during and after the COVID-19 pandemic when many people lost their jobs and struggled to find new work.

According to the Kansas City Federal Reserve, the share of Americans who are newly delinquent on their payments has risen to 9%. That’s also the highest it’s been since 2011. The Kansas City fed said the number of people only making minimum payments is also at an all-time high.

How are the wealthy keeping the economy afloat?

Moody’s said the top 10%, which are those making more than $250,000 per year, account for nearly half of all consumer spending in the United States and one-third of the nation’s gross domestic product.

Between September 2023 and September 2024, the country’s top earners increased their spending by 12%. At the same time, spending was down among working- and middle-class Americans.