The rich fuel the economy, stopping the recession, the stock market crash.

Money may not buy happiness, but he buys things. And buying things is at the heart of our consumer -oriented economic engine. Recently, it was richer people, especially, who have kept this engine on the move. The best not to like high prices, and they feel uncertain, but they spend all of this – and everyone depends more and more to be able to continue.

In the immediate postpandmic era, consumers of the income spectrum spend as gangbusters. For many people, being stuck at home for months has meant a lot of repressed request and money to spend. But in the past two years, consumer history has been divided into two.

Persons with lower and intermediary have had to withdraw and be more judicious with their expenses in the middle of inflation, an increase in interest rates and the rise in costs of budgetary pillars such as rent, food and gas. High income people have been able to postpone these concerns, thanks to the increase in equity prices and a solid housing market.

“High income families have done more than their fair share of spending,” said Gregory Daco, Ey-Parthenon chief economist.

Companies have resumed this split: Walmart said that high income buyers increased its sales. In its latest call for results, McDonald's managers said they saw a “divided” economy, with a sharp drop in low and average income consumers while high income visits remain solid.

“The rich, the wealthy, lead the economic train, yes, at this stage,” said Mark Zandi, chief economist of Moody's. “This is always the case, but to a greater extent now.”

How drastic is the split between income groups to debate. An analysis of Moody's earlier this year, reported for the first time by The Wall Street Journalestimated that the highest 10% of households, which means those which earn $ 250,000 per year or more, represented half of all expenses, compared to approximately a third year ago. In the opinion of Daco, Moody's analysis can open up the bifurcation a little, but it is undeniable that there is a bifurcation. He tells me that he sticks to the 60-40 rule, which says that the 40% most important income, so that those who earn about $ 100,000 or more, “make around 60% of expenses, and the lowest 60% make 40% of expenses”. Daco tells me it starts to change. “We have seen this increase, this share for the rise in 40% greater than around 65%,” he added.

Federal reserve Economists examined retail expenses on goods last fall, using Numerator data, a consumer data company. They found that consumers with average and high income were those who kept the current growth, while low -income expenses had been stable. This year, expenses among consumers with low and average income fell, while high -income consumers maintain their pace.

“It does not seem that high -income households have rejected. It is quite flat,” said Leo Feler, chief economist of Numerator. “When we look at the aggregate and say:” OK, well, aggregate consumers have always released and spent “, this aggregate is really motivated by high income households.”

This also appears in credit card expenditure data. As CNBC recently reportedSynchrony, which manufactures brand cards for everyday companies such as Walgreens and JCPENNEY, said that it had a 4% drop in expenses during the first quarter of the year, while American Express and JPMORGAN CHASE, who target high -end consumers, have increased expense increases. Joe Wadford, economist of the Bank of America Institute, said in an email that his business data showed that high-income households had continued to spend at least until April, despite the stock market chaos. “In fact, our data show that the third and 5% higher households per income have noted any deterioration in the overall growth in spending,” he said.

It is higher income households that can suddenly drop $ 1,500 to a new TV.

The conversation in many wealthy circles-that is to say the upper middle class and above-seems to be: “My God, everything is so expensive today. Anyway, I told you about my last trip to Paris?”

Despite the growing tide of uncertainty, richer people were ready to pass for many reasons. They saved a lot during the pandemic because of the home orders. They also saw their stock portfolios and their housing values ​​increase considerably. Despite this year's market problems, the S&P 500 is still up to 100% in the past five years. The values ​​of the houses skyrocketed and many owners were able to lock the lower mortgage rates a few years ago, which helped them to save on their monthly payments.

“Even if it is not an income made in the sense that people do not necessarily sell their actions or are not conceded on their domestic capital, they perceive themselves as being richer,” explains Feler.

Consumer expenses Sauté in recent monthsPartly because of people who try to get ahead of related prices and price increases. Feler says that it is probably richer consumers who make the expenses – it is them with the additional money at hand to be able to try to get ahead of the prices.

“It is higher income households that can suddenly drop $ 1,500 to a new television and buy a new TV before prices increase. They can release and reduce $ 6,000, $ 7,000 on a brand new car,” he said. “Low -income households do not have the capacity to do so because they have not only seated $ 1,500.”

In an online survey of the Harris survey on behalf of Rakuten, a silver shopping platform, carried out in March, 12% of people earning more than $ 100,000 per year said that they could not afford to pay their bills, while 33% won less than $ 50,000.

You want to have as many growth engines as possible, and count on a limited set of economic engines exposes you to lower risks.

There are risks for the economy to depend on a relatively low number of people to maintain and grow. Namely, if things start to go south for rich people – or they start to worry, their fortune changes – things can go south for everyone. High income can have more resilience to the weakness and inflation of the potential labor market than low -income people, but they are not completely isolated.

Zandi de Moody's says he is not too worried about the expenses of the wealthiest people to fall from a cliff, although it can fall somewhat. “The equity prices are down, the housing values ​​have become flat, so that their wealth may not increase almost in the same degree, which can withdraw a certain juice from their expenses over time,” he said.

There is an adage among economists and investment analysts that the stock market is not the economy, intended to recall that the small lines that rise and descend are not reliable indicators of what is happening in the real economy, in fields such as jobs, wages and expenses. But given the effect of richer people on the economy and the effect of the stock market on their expenses, the market is a little bit the economy. The economy is therefore sensitive to swings in the stock market. If a person who makes $ 200,000 sees actions plunge, they can think twice before going to this restaurant in the street for dinner and opting for a meal at home. This strikes the restaurant, the server and the rest of the staff, and can possibly rally through the economy.

“You want to have as many growth engines as possible, and count on a limited set of economic engines exposes you to lower risks,” explains the Daco d'Ey-Parthenon.

Practically no one feels hot about the economy right now. Investigations of the University of Michigan found that consumers' feeling had plunged into all income groups this year.

“Due to the opposite winds that we are going through, you already feel a slowdown in expenses for the majority of households,” explains Daco. “And you essentially risk a new slowdown on the one hand, which stimulates a larger share of expenses that could be subject to stress of the volatility of the financial markets, the drop in pressure on actions, the environment of the uncertainty that we see.”

We are all together, rich and poor. It could be up to everyone to tell each other for each other – and perhaps the stock market in particular.

Emily Stewart is a main correspondent at Business Insider, writing on business and the economy.