The top 10% of earners drive nearly half of all consumer spending. Is our economy too dependent on the wealthy?

Those top earners, defined as Americans making at least $251,000 in 2024 according to Census data (2), drove 49.2% of consumer spending in the second quarter of 2025. That share has steadily grown for years: it was about 46% in 2023 and roughly 43% in 2020.

“Their financial situation is about as good as it’s ever been,” Moody’s chief economist Mark Zandi told USA Today. Surging stock prices, record-high home values, and years of pandemic-era savings have boosted their purchasing power even as many other households remain squeezed.

Meanwhile, consumer confidence among middle earners has fallen to its lowest point since mid-2022, reflecting growing anxiety among families facing higher costs and limited financial breathing room (3).

This growing divide between high and middle to low earners is fueling what economists call a K-shaped economy, where one group (typically higher earners) continues to climb while another plateaus or declines (4).

With this potentially dire economic outlook ahead for middle-income earners, here’s how you can budget, balance wants and needs, and find ways to spend without breaking the bank.

The impact on the overall economy

For middle and lower-income Americans, spending has barely budged. Households in the 40th to 60th income percentile spent about $2.1 trillion in the second quarter of 2025 — almost unchanged from what they spent in 2023 and 2024, according to USA Today (1).

These consumers are still grappling with elevated cost of living from pandemic-era surges, with federal data showing prices are roughly 25% higher than they were in 2020 (5).

Rising prices aren't the only factor driving this divide. Wealthier households tend to own homes and hold more in stocks.

The typical stockholder in the top 10% owned $1.1 million in equities in the third quarter of 2025, up sharply from $624,000 at the end of 2022, according to University of Michigan survey data. High earners overwhelmingly expect the market to keep rising — and when they feel confident, they tend to spend more (6).

Lower-income Americans, by contrast, have faced a cash crunch. Their wages haven’t kept pace with inflation, and many are increasingly turning to discounts and buy-now, pay-later financing to get through the holidays (1).

All of this leaves the broader economy more vulnerable. Because consumer spending accounts for about 70% of GDP, relying so heavily on a relatively small slice of the population creates a structural risk.

If high earners cut back because of job losses, stock-market volatility, or falling home values, their restraint could ripple throughout the economy.

As Zandi warned, “This group is driving the economic train with their spending. If they pull back, they’ll take the economy with them (1).

How households can stay afloat

Much of the economy’s momentum now depends on whether high earners maintain their current spending habits. A meaningful decline in stock prices, analysts say, could translate into an immediate cutback in discretionary spending.

For everyone else, budgets remain tight. Prices might not be rising as quickly as they were in 2022, but they’re still far higher than pre-pandemic levels.

Here are a few ways households can navigate the new year without derailing their finances:

Prioritize your spending: Focus spending on what matters most, whether that’s travel or key household purchases.

Set a firm spending cap: Consider giving yourself a budget and using cash or a debit card to stay within limits. When the money’s gone, you’re done.