Sticky inflation, white-collar layoffs, and surging rates of interest are all placing stress on a sure kind of American — higher-income earners.
“What we usually see in an financial recession is that lower- and moderate-income households actually bear the brunt of it when it comes to job losses and monetary hardships,” mentioned Greg McBride, senior monetary analyst at Bankrate.com. “We have not seen that.”
The inventory market, a supply of wealth for the wealthy, struggled in 2022. The S&P 500 sank greater than 19%. The similar 12 months, 1.8 million Americans misplaced their millionaire standing, in accordance with UBS’ 2023 Global Wealth Survey. Despite the inventory market’s summer time rally in 2023, the U.S. financial system nonetheless faces a number of headwinds.
Bank of America’s Consumer Checkpoint Survey for September 2023 discovered that high-income households have change into extra pessimistic about the financial system. The similar group additionally seems extra cautious about spending due to smooth wage development and slowing job creation for excessive earners.
Watch the video above to seek out out extra about how the so-called “richcession” may have an effect on the whole financial system.