The US economy is a house of cards

Spending by the rich and big tech can only keep the party going for so long...

Consumption spending makes up about 70% of GDP in the US – similar to other advanced economies. But the US is a very large economy, which means the American consumer is responsible for propping up not just the US economy, but a significant share of global economic output. The US consumer is, then, extremely important.

Yet a striking new statistic reveals just how unequal consumer spending has become. Households in the top 10% of the income distribution now account for half of all consumer spending in the United States. That is an astonishing concentration of purchasing power, and it suggests that the long-term foundations of US economic growth are deeply unsustainable.

The wealthy may spend more in absolute terms, but they actually spend a smaller share of their income than everyone else.