The US economy runs on spendings of the 1% – but that clock may be ticking
The post The US economy runs on spendings of the 1% – but that clock may be ticking appeared on BitcoinEthereumNews.com.
The economy in the United States is getting squeezed by the very people who’ve been keeping it alive. On Monday, Bloomberg reported that rich Americans—who’ve been responsible for almost half of all consumer spending—are starting to tighten their wallets. Their spending has carried the economy through pandemic shocks, rising interest rates, and inflation. But now, with stocks crashing and confidence fading, that lifeline is weakening fast. Over the last month, trillions of dollars have been erased from U.S. stock markets. The S&P 500 dropped more than 10% from its recent peak, putting it in correction territory. It’s still down 8% from its February high. This plunge followed growing concerns about President Donald Trump’s escalating trade war. The market chaos is making high-income earners nervous, and they’re starting to back off from the kind of spending that has kept the economy running. Rich Americans rethink their spending as markets fall David Lowell, a 66-year-old live-events producer from Roswell, Georgia, said on Monday that he spent $40,000 remodeling his kitchen back in October. Back then, markets were climbing, and his retirement savings looked solid. But things have changed. His portfolio has dropped by hundreds of thousands of dollars in the last few weeks. Now, he’s pausing any big purchases. “I feel a little uneasy after the last six weeks of this complete stock market capitulation,” David said. He checks his investment accounts four times a day. Federal Reserve officials last week responded to the financial uncertainty by slashing their growth projection for 2025. In December, they expected the economy to expand 2.1%. Now, they’re saying 1.7%. Their reason: they’re unsure how Trump’s trade policies will affect growth going forward. Troy Ludtka, senior U.S. economist at SMBC Nikko Securities Americas, explained the problem. “We’re now at a point where the stock market—a strong…
Filed under: News - @ March 24, 2025 1:21 pm