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The economy is already in a “selective recession,” according to JPMorgan’s Matthew Boss.
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Low-income consumers are pulling back on spending while top-earners are fueling the economy.
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The top 10% of American earners have gained more than $30 trillion in wealth since 2020, Fed data shows.
The US economy is being split by a “selective recession,” as some consumers see “huge” wealth creation while others struggle to get by, according to JPMorgan analyst Matthew Boss.
The equity analyst pointed to the divide between low-income and high-income consumers. High-income consumers are thriving, evidenced by the $40 trillion worth of spending they’re driving into the economy, which is around half of all consumer spending in the US, Boss estimated.
Lower- to middle- income consumers, though, appear to be falling behind as the cost of living rises, Boss said previously. The bottom 20% of consumers are contributing to just 10% of the economy’s total spending, he said, citing national retail sales data.
“The backdrop that we face in our work is a selective recession, and what that means is you are going to have extreme volatility. We think the higher income consumer — a lot of wealth creation,” Boss said in an interview with CNBC on Thursday. “The low-income consumer, that’s the melting ice cube,” he added.
The richest Americans…
