The U.S. economy is improving. Based on GDP growth, the recession is long behind us and the job market continues to make solid gains each month, even if we're still nowhere near full-employment.
But life seems especially sweet for America's most affluent. Rich Americans (defined as those with discretionary income of $100,000 or more) are set to spend $359 billion on luxury items this year, up 8% or $26 billion from the previous year. In the last three years, luxury spending has nearly doubled, according to an American Express Publishing and Harrison Group survey.
"While 70 percent of affluent Americans still believed the country is in recession, they are less anxious -- concern over job loss has fallen 50 percent from 2010 and worries about the potential failure of their company are down to 11 percent from 28 percent," Reuters reports.
Beyond being great news for the luxury goods market, the survey highlights the income and wealth gap in America. The top 10% of earners in the U.S. account for half the consumer spending. Furthermore, the top 1% of Americans own a third of the country's wealth.
And, the discrepancy isn't getting any better. The New Yorker had this to say about incomes last August:
"Between 2002 and 2007, for instance, the bottom 99 percent of incomes grew 1.3 percent a year in real terms — while the incomes of the top 1 percent grew 10 percent a year. That 1 percent accounted for two-thirds of all income growth in those years…. Even within the top 1 percent, income is getting more concentrated: the top 0.1 percent of earners have seen their share of national income triple over the same period…"
Federal Reserve policy is also exacerbating the problem, Aaron notes in the accompanying clip. While the Fed arguably staved off a depression, their zero interest rate policy has benefited Wall Street and the wealthy far more than the middle class. Cheap money has fueled the bull market in stocks since March 2009 (disproportionately benefiting the rich) while the weakening dollar has driven up the price of food and fuel (disproportionately hurting the middle and lower class.)