Spending is Down Among the Wealthy, Sparking Concerns of a Trickle Down Recession
September 9, 2019
While strong consumer spending is keeping the American economy strong, that spending is weakest at the very top. The rich have begun to slow spending on everything from homes to luxury cars, causing some economists to worry about a “trickle-down” recession.
Luxury real estate is having its worst year since the financial crisis. Top markets like Manhattan have seen six straight quarters of decline, and sales of homes costing more than $1.5 million saw a 5 percent decline last quarter, according to data from Redfin. High-end retailers like Barney’s and Nordstrom’s are struggling. Art auction sales have seen big declines this year.
The richest 10 percent of the country owns more than 80 percent of the stocks, so they are more sensitive to volatility in the market. Their recent pullback may presage a wider slowdown that could spread to the middle class.