Yogthos
@yogthos@social.marxist.network  ·  activity timestamp 16 hours ago

The "K-shape" economy is back. It's one of the most important charts to understand the state of the economy.

The wealthy are still spending, although there has been some moderation. Meanwhile the bottom 80% are tapped out. Their spending is basically in line w/inflation.

Whether the US ends up in a recession will depend almost entirely on whether the top 10 to 20% of earners keep spending.

https://www.washingtonpost.com/opinions/2025/08/06/economy-jobs-middle-class-recession-tariffs/

#usa #economy

This is a line chart titled "The U.S. economy depends on consumption by the rich." The chart plots the percentage growth in personal outlays versus inflation from 2020 to mid-2025. There are four lines on the chart: Top 20% (Green line): This line shows the spending growth of the wealthiest Americans. It starts flat in 2020, drops slightly below zero, and then rises sharply from late 2020, peaking at over 50% growth in early 2024. It ends slightly below that peak, at around 48% growth, in 2025. Middle Class (Blue line): This line represents the spending growth of the middle class. It starts near zero, dips sharply into negative territory in 2020-2021, a period labeled "Pandemic savings." It then rises steadily, crossing the inflation line in mid-2022 and peaking at about 25% growth in late 2023. It ends in 2025 at a growth rate similar to inflation. A label points to the period of its rapid increase as "Revenge spending." Bottom 40% (Dark Blue line): This line shows spending growth for the lowest-income Americans. It follows a similar path to the middle-class line, with a sharp dip in 2020-2021, a rapid rise, and a peak around 25% in late 2023. It also ends in 2025 at a growth rate similar to inflation. Inflation (Red line): This line represents the inflation rate. It starts near zero in 2020, rises steadily, and ends in 2025 at a growth rate of about 25%.
This is a line chart titled "The U.S. economy depends on consumption by the rich." The chart plots the percentage growth in personal outlays versus inflation from 2020 to mid-2025. There are four lines on the chart: Top 20% (Green line): This line shows the spending growth of the wealthiest Americans. It starts flat in 2020, drops slightly below zero, and then rises sharply from late 2020, peaking at over 50% growth in early 2024. It ends slightly below that peak, at around 48% growth, in 2025. Middle Class (Blue line): This line represents the spending growth of the middle class. It starts near zero, dips sharply into negative territory in 2020-2021, a period labeled "Pandemic savings." It then rises steadily, crossing the inflation line in mid-2022 and peaking at about 25% growth in late 2023. It ends in 2025 at a growth rate similar to inflation. A label points to the period of its rapid increase as "Revenge spending." Bottom 40% (Dark Blue line): This line shows spending growth for the lowest-income Americans. It follows a similar path to the middle-class line, with a sharp dip in 2020-2021, a rapid rise, and a peak around 25% in late 2023. It also ends in 2025 at a growth rate similar to inflation. Inflation (Red line): This line represents the inflation rate. It starts near zero in 2020, rises steadily, and ends in 2025 at a growth rate of about 25%.
This is a line chart titled "The U.S. economy depends on consumption by the rich." The chart plots the percentage growth in personal outlays versus inflation from 2020 to mid-2025. There are four lines on the chart: Top 20% (Green line): This line shows the spending growth of the wealthiest Americans. It starts flat in 2020, drops slightly below zero, and then rises sharply from late 2020, peaking at over 50% growth in early 2024. It ends slightly below that peak, at around 48% growth, in 2025. Middle Class (Blue line): This line represents the spending growth of the middle class. It starts near zero, dips sharply into negative territory in 2020-2021, a period labeled "Pandemic savings." It then rises steadily, crossing the inflation line in mid-2022 and peaking at about 25% growth in late 2023. It ends in 2025 at a growth rate similar to inflation. A label points to the period of its rapid increase as "Revenge spending." Bottom 40% (Dark Blue line): This line shows spending growth for the lowest-income Americans. It follows a similar path to the middle-class line, with a sharp dip in 2020-2021, a rapid rise, and a peak around 25% in late 2023. It also ends in 2025 at a growth rate similar to inflation. Inflation (Red line): This line represents the inflation rate. It starts near zero in 2020, rises steadily, and ends in 2025 at a growth rate of about 25%.
Lucky Bumgardener
@kmck@mas.to replied  ·  activity timestamp 16 hours ago
@yogthos I worked on the technical side of consumer packaged goods branding for most of my career, and this trend was the thing all the strategists seemed most eager not to see or think about, as the entire category was founded on the existence of a durable middle class. (Now I work on the technical side of high end spectacle-events, to my relief)