The U.S. consumer is back. Well, sort of—the wealthiest Americans have been doing much of the heavy lifting.
The latest consumption data is consistent with the broader strength of the U.S. economy. Personal Consumption Expenditure data came in at 2.7% year-over-year in September versus 2.5% in August, explains Senior Macro analyst Darius Dale in the video above.
A noteworthy callout from the report is the 60 basis point acceleration in year-over-year aggregate private sector income growth of 3.4%. This was the fastest pace in 6 months. Also goosing the consumption data was a 50 basis point decline in the savings rate, down to 3.1%. That’s the lowest since November 2007.
Drilling down… The wealthiest Americans appear to be feeling fine. Spending on luxury goods – calculated by segmenting dollars spent on pleasure boats, aircrafts, jewelry and watches – was up 10% year-over-year. This is important considering the top 20% of American income earners constitute 40% of total U.S. consumer spending.
No surprise the wealthiest Americans are feeling flush. The top 10% of American households own 85% of U.S. financial assets. The S&P 500 up 15% year-to-date so these gains disproportionately flow to the richest Americans.
