{"id":10969,"date":"2025-08-18T15:06:30","date_gmt":"2025-08-18T12:06:30","guid":{"rendered":""},"modified":"2025-08-18T15:06:42","modified_gmt":"2025-08-18T12:06:42","slug":"us-economic-data-masks-a-growing-crisis-for-low-income-households","status":"publish","type":"post","link":"https:\/\/harici.com.tr\/en\/us-economic-data-masks-a-growing-crisis-for-low-income-households\/","title":{"rendered":"US economic data masks a growing crisis for low-income households"},"content":{"rendered":"

The long-awaited economic slowdown for the US economy has already begun for poorer Americans.<\/p>\n

Higher-income consumers<\/span><\/a> account for a large portion of the spending that remained resilient this summer, despite price increases related to tariffs and a slowdown in employment.<\/p>\n

On the other hand, tensions are emerging beneath the surface for poorer Americans, which is seen as a sign that this could soon spread to broader sectors of the economy.<\/p>\n

Retail sales increased by 0.5% in July, while the previous month’s shopping activity exceeded initial estimates (a 0.9% increase in June).<\/p>\n

The data, which is not adjusted for inflation, was likely boosted by an increase in seasonal online sales, rising prices, and purchases made ahead of tariffs.<\/p>\n

The \u201ccontrol group\u201d included in GDP calculations (excluding volatile categories like building material stores, auto dealers, and gas stations) also saw a 0.5% increase, marking a solid start to the third quarter.<\/p>\n

A separate indicator from Bank of America showed similarly strong spending last month, but this masked a slowdown among the poorest Americans.<\/p>\n

Overall, per-household credit and debit card spending rose by 0.6% in July, reaching its highest level since January with a 1.8% year-over-year increase.<\/p>\n

However, for the lowest-income group, with an annual income of approximately $50,000 or less, spending growth has come to a standstill.<\/p>\n

According to a new study published this week by the Boston Fed, spending by the lowest-income group has shown only a moderate increase since 2022, while spending by those earning over $121,000 has continued to rise sharply.<\/p>\n

This spending gap is also reflected in slower-growing wages for low-income groups, which reduces their purchasing power.<\/p>\n

According to post-tax wage and salary data from the Bank of America (BofA) Institute, the wages of low-income households increased by only 1.3% in July compared to the same period last year, while the wages of high-income households grew by 3.2%.<\/p>\n

For the lowest-income third, households with an annual income of approximately $50,000 or less, spending growth was 0.0%, according to BofA’s analysis of its internal credit and debit card spending data.<\/p>\n

\u201cIt is noteworthy that employment growth has significantly lagged in some sectors with lower average hourly earnings, such as retail, wholesale, leisure, and hospitality,\u201d the BofA Institute wrote in a note.<\/p>\n

Wealthier Americans are more likely to benefit from the stock market boom, which has climbed to new highs despite concerns about an economic slowdown.<\/p>\n

A Michigan University survey<\/em> released today revealed that high-income consumers are \u201cmuch more likely\u201d to continue their spending as usual in the face of high inflation compared to low-income consumers.<\/p>\n

For the low-income segment, there are more obstacles, including price pressures related to tariffs. This group spends a larger portion of its income on goods most affected by the White House\u2019s trade policy.<\/p>\n

According to a new analysis by the Congressional Budget Office, cuts to health programs and social services will cumulatively impoverish the lowest-income Americans even further over the next decade compared to the institution’s previous forecasts.<\/p>\n

BofA’s analysis showed that in July, spending by high-income households increased by about 2% year-over-year, while spending by middle-income households grew by 1%.<\/p>\n

\n","protected":false},"excerpt":{"rendered":"

The long-awaited economic slowdown for the US economy has already begun for poorer Americans. Higher-income consumers account for a large portion of the spending that remained resilient this summer, despite price increases related to tariffs and a slowdown in employment. On the other hand, tensions are emerging beneath the surface for poorer Americans, which is […]<\/p>\n","protected":false},"author":1,"featured_media":10970,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false,"footnotes":""},"categories":[176],"tags":[3007,12249,12250,3291,12254,12252,8869,503,12253,917,12247,1126,8028,12248,2360,1131,12251],"class_list":["post-10969","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-america","tag-bank-of-america","tag-boston-fed","tag-congressional-budget-office","tag-consumer-spending","tag-credit-card-spending","tag-economic-inequality","tag-economic-slowdown","tag-headline","tag-household-income","tag-inflation","tag-low-income-households","tag-recession","tag-retail-sales","tag-spending-gap","tag-tariffs","tag-us-economy","tag-wage-growth"],"yoast_head":"\nUS economic data masks a growing crisis for low-income households - 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