Wealthy Americans are starting to spend more carefully

Americans with significant wealth may begin curbing their spending habits after years of driving the US economy with their expenditures. Despite inflation and the Federal Reserve’s efforts to rein in prices, household wealth in the US has increased over the past few years. A strong stock market and rising home values have contributed to the wealth effect, allowing Americans to weather inflation and indulge in travel, concerts, and big-ticket purchases. However, recent economic indicators show a slowdown in momentum, with employment and retail spending figures falling short of expectations. Wealthy Americans are exhibiting more caution, leading to declines in luxury retail sales and high-end liquor demand, among other signs. While there are still positive indications, such as robust bookings for cruises, consumers overall have become more price-conscious. The Federal Reserve’s observations suggest that companies are facing resistance from customers, leading to them reconsidering price increases. In terms of credit card debt, research shows that a significant portion of Generation Z borrowers have maxed out their cards, indicating financial difficulties.