Overview
- Bank of America says January card spending rose 2.6% year over year overall, yet growth for higher‑income customers outpaced middle‑ and lower‑income peers 2.5% vs. 1.0% and 0.3%, the widest gap since mid‑2022.
- After‑tax wage growth in January was 3.7% for higher‑income households, compared with 1.6% for middle‑income and 0.9% for lower‑income households, reinforcing the split.
- Premium‑focused firms such as Ralph Lauren, Tapestry, American Express and major airlines posted strong results, while mass‑market brands signaled strain, with PepsiCo cutting snack prices by up to 15% and Kraft Heinz and PayPal citing pressure.
- Moody’s estimates the top 10% of households now account for nearly half of consumer spending, and University of Michigan data show sentiment rising for stockholders but stuck at low levels for those without equities.
- Credit counselors warn financial stress is nearing a tipping point for more middle‑income consumers, though potentially larger tax refunds—projected to be $300 to $800 higher—may offer only brief relief.