America’s Two-Speed Economy: How the Rich Are Driving Spending

America’s economy is now running on two separate tracks. The top 10% of households—those earning over $250,000 yearly—account for half of all consumer spending and a third of GDP, according to Moody’s Analytics.

This concentration of spending power has reached record levels since tracking began in 1989, nearly doubling from the 1990s when these high earners represented just a third of consumer spending. This explains today’s contradictory economic signals: packed luxury restaurants alongside soaring credit card defaults, and sold-out premium events while inflation squeezes the middle class.

“I’m not comfortable with it,” warns Mark Zandi, Moody’s chief economist, about this dangerous “wealth effect.” These affluent spenders, mostly older Americans, derive their purchasing power from appreciated homes and stock investments in tech companies with AI-inflated values that Zandi calls “bordering on frothy.”

The impact goes beyond creating economic vulnerability. Industries are actively reshaping to serve wealthy customers. Car manufacturers now focus on expensive SUVs over affordable models, driving average new car prices up more than 50% since 2014 to nearly $50,000—putting new vehicles beyond reach for average Americans.