A new analysis highlights the financial pressures confronting younger generations in today’s economy, revealing disparities in spending power and economic sentiment. While overall consumer spending remains strong, contributing more to GDP than at any point in the past 15 years, this momentum is largely driven by high-income households. According to findings presented by Mark Mathews, chief economist at the National Retail Federation, the top 10% of earners now account for half of all consumer expenditures—up from 37% in 1990. This growing imbalance reflects what economists describe as a ‘K-shaped’ recovery, where economic gains are concentrated among wealthier individuals while lower- and middle-income groups face rising costs and diminished savings.
Despite widespread pessimism about personal finances—fueled by elevated prices for essentials like groceries and fuel—actual spending behavior has not slowed. Mathews noted a disconnect between public perception and economic data, partly because official metrics compare current figures to those from just one year prior, whereas many consumers recall prices from five or ten years ago when assessing affordability. Credit card debt remains manageable for most, though auto and student loans continue to be primary sources of financial strain.
The report also touches on broader labor market trends, including stagnant population growth and a shrinking workforce, which could dampen future economic expansion. With fewer new workers entering the job market, companies are relying more on internal promotions rather than hiring externally. Job openings are declining, but so are layoffs, helping keep unemployment rates stable—for now.
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New report looks at economic challenges Gen Z and Millennials face WSYR