Chart of the Week

Credit part of consumer spending’s resilience in recent years to unexpected increases in household wealth atop gains in inflation-adjusted incomes. While households often use these gains to strengthen their financial positions, behavioral surveys¹ suggest that a meaningful share is also directed toward spending. Inflation-adjusted growth of household wealth has accelerated steadily since early 2025 to its strongest pace since the third quarter of 2024.

We estimate that an unusually long stretch of generally above-trend growth illustrated in the chart left households with a cumulative $38 trillion in unexpected wealth gains by mid-2026. Unlike periods of sizable wealth gains in the recent past, these increases have not been offset by a subsequent setback in the financial market.

Upper-income families account for the lion’s share of the financial assets in the U.S. and have benefited most from wealth gains since late 2023. We believe a portion of these persistent increases has been converted into spending (directly or through borrowing against that wealth) that has helped support consumer demand during the post-COVID economic growth cycle, particularly for higher-ticket discretionary goods and services.

¹ Empower, “What would Americans do with a windfall,” September 15, 2026, New York Federal Reserve, " Spending Responses to Gains, Losses, News, and Loans," March 2018

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