JPMorgan Strategist Reports on 'Selective Recession' in US Economy, Driven by Wealth Inequality and Consumer Spending

JPMorgan strategist Matthew Boss suggests that the U.S. economy is experiencing a "selective recession," with high-income households benefitting from substantial wealth gains while lower-income consumers struggle. The top 10% of Americans, who own a majority of stocks, have seen a $30.5 trillion increase in wealth since 2020. Conversely, the bottom 50% of earners have experienced limited financial growth. This disparity is reflected in consumer spending patterns, with high-income individuals driving 50% of consumer spending, while the bottom 20% contribute only 10%.

The US economy is experiencing a "selective recession," according to JPMorgan strategist Matthew Boss. While high-income households continue to benefit from substantial wealth gains, lower-income consumers struggle to keep up with the rising cost of living [1]. This disparity is reflected in consumer spending patterns, with high-income individuals driving 50% of spending, while the bottom 20% contribute only 10% [1].

The divide between upper-income and middle-to-lower income Americans is becoming increasingly evident. According to a survey by Primerica, 67% of middle-class households believed their income was falling behind the cost of living in the first quarter of this year [1]. Inflation, which has cooled from its highs but remains a concern, is taking a toll on consumers' savings [1]. Most Americans have likely depleted their pandemic-era savings, leaving many without an emergency fund [1].

The impact of this "selective recession" is particularly felt by lower-income consumers. According to a survey by JPMorgan, over 70% of low-income consumers are struggling to make ends meet [1]. As inflation continues to persist and savings dwindle, the pressure on this vulnerable population is likely to intensify.

This trend is not unique to the US. Global economic uncertainty and inflationary pressures are leading to concerns about a potential slowdown in consumer spending, particularly for middle-class households [1].

As the economy navigates this challenging period, understanding the dynamics of the "selective recession" and its impact on different income groups is essential. Policymakers and industry experts must work together to address the root causes of inequality and ensure that economic growth benefits all Americans.

References:
[1] Zhuweiyi, D. (2023, March 21). US economy in 'selective recession,' JPMorgan's Matthew Boss says. Finance.yahoo.com. https://finance.yahoo.com/news/us-economy-selective-recession-lower-233311821.html