Chart of the Week

While 2025 was a strong year for consumer spending, it was defined by a widening gap between upper- and lower-income spending, with the top 10% of income earners responsible for almost 50% of consumer spending, according to Moody��s Analytics. One key contributor to disproportionate upper-income household wealth gains and spending was exposure to stock-market gains.

As shown in the chart, the top 20% of households by income saw the share of their net worth in the stock market (as represented by corporate equities and mutual funds) increase to 40% as of the third quarter of 2025. Related gains in household wealth have resulted in “dry powder” for big-ticket spending. Meanwhile, this figure was significantly lower for the bottom 80% of households by income, with just 15% of their net worth derived from stock-market exposure.

We expect another year of solid economic and earnings growth to sustain the rally in financial assets that, in turn, is powering gains in household wealth and perpetuating consumer spending skewed toward upper-income households. However, we expect that lower-income groups with relatively little (or no) exposure to financial wealth will remain pressured by the high cost of essentials and modest further wage disinflation, both contributing to rising debt.

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