High-Income Consumers Cut Back On Their Nice-To-Haves When The Economy Weakens

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Since the start of 2023, consumers making over $100,000 a year have been moving into the paycheck-to-paycheck ranks at a faster rate than other demographics, increasing by four percentage points between January and March.

While the share of lower-income employees actually decreased during the same time period, the share of middle-income earners climbed by less than one percentage point. Although this indicator has fluctuated somewhat throughout the course of the research, the fact that the high-income paycheck-to-paycheck rate did not mirror this surge the previous year suggests that this is not a seasonal blip.

Higher-income consumers who live paycheck to paycheck have up to this point followed patterns like those in other consumer groups, albeit with less draconian cost-cutting measures.

Federal Reserve figures reveal that median household expenditure growth expectations for consumers earning more than $100,000 per year have decreased to 5% from 5.8% in September, indicating that consumers are adjusting to the effects of inflation lasting longer than predicted.