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US Consumers Lean on Wealth as Spending Support
1 Apr
Summary
- Consumer spending on motor fuels is near a record low share of income.
- Household savings rates have diminished, highlighting reliance on accumulated wealth.
- Corporate equities represent a record high portion of household net worth.
US consumer spending is showing resilience, with households relying more on accumulated wealth as savings rates decline. Spending on motor fuels has stabilized at a low percentage of disposable income, offering some buffer against current gas price increases. This shift underscores the growing importance of assets, particularly equities, in propping up consumption.
At the end of 2025, corporate equities held a record high share of household net worth, exceeding a quarter of the total. This suggests that market performance, especially in the stock market, could significantly influence future consumer behavior. A substantial correction in equity prices might lead to a sharper slowdown in spending, particularly among affluent consumers, with potential ramifications for the US labor market.
Recent data indicates that upper-income households have been particularly affected by market volatility, as seen in a pronounced March slump in consumer sentiment. As the nation anticipates February retail sales figures, the connection between wealth effects and consumer health remains a critical focus for economic analysis.
