Rachel Louise Ensign
Appearances
WSJ What’s News
U.S. Economic Growth Relies on Rich Americans More Than Ever
While everyone else is kind of feeling pretty pinched with prices up so much, affluent people are in a really different situation because they look at the value of their homes, their stock portfolios. And, you know, they're up like 45 percent.
WSJ What’s News
U.S. Economic Growth Relies on Rich Americans More Than Ever
The main reasons for this are two really big factors. First is that in the pandemic, people across income groups saved a lot. And then a lot of it was also government stimulus. And people saved a lot of money across the board. But obviously there's been a lot of inflation and working class and middle class people have pretty much spent most of that extra money, whereas well-off people haven't.
WSJ What’s News
U.S. Economic Growth Relies on Rich Americans More Than Ever
So they're sitting on all this extra savings. And then on top of that, well-off people are more likely to own homes, have stock portfolios, and those have gone up in value tremendously. So while everyone else is kind of
WSJ What’s News
U.S. Economic Growth Relies on Rich Americans More Than Ever
feeling pretty pinched with prices up so much, affluent people are in a really different situation because they look at the value of their homes, their stock portfolios, and they're up like 45%.
WSJ What’s News
U.S. Economic Growth Relies on Rich Americans More Than Ever
So they're spending on all sorts of stuff. Travel is a big category. A lot of folks are like, well, I didn't get to travel for four years. Time is precious and I'm going to splurge now. And then Bank of America has data on spending and they found that the top 5% of households spent more than 10% more on luxury goods abroad compared to a year earlier.
WSJ What’s News
U.S. Economic Growth Relies on Rich Americans More Than Ever
Is that right? These people are often pretty highly educated. They're aware of inflation and they notice it. There was one family in the story where they know that their grocery bill is higher, but buying organic is just important to them and they can afford it. So the bottom line is inflation has had a tremendous impact on people in the bottom 80%.
WSJ What’s News
U.S. Economic Growth Relies on Rich Americans More Than Ever
But the top 10%, they know that it's happened, but they're fine. In fact, they're better than they were before.
WSJ What’s News
U.S. Economic Growth Relies on Rich Americans More Than Ever
Right. Well, that is the risk, right? Because in the data analysis that we have from Moody's Analytics, what they found is that last year, the bottom 80% of earners cut spending and the top 10% increased spending by 12%. So this group is really driving the economy. And if they
WSJ What’s News
U.S. Economic Growth Relies on Rich Americans More Than Ever
start to feel less confident it could be a big hit to economic growth in this country because they're pretty much the only ones who are living large these days that was wsj reporter rachel ensign thank you rachel thank you