The U.S. economy is being propped up by the spending habits of the wealthy while low and middle-income are recording rising debt levels that could be further impacted by President Donald Trump’s economic plans. Analysis from the Boston Fed on credit card data found that people earning $120,000 and up have been continuing to spend healthily since 2021 and 2022, whereas those earning under $39,000 and middle-income earners have since seen more sluggish spending over the past three years, reported Axios. At the same time, credit card balances for low and middle-income groups are now higher than before the COVID-19 pandemic, but the complete opposite for the wealthy, whose debt remains below 2019 levels, meaning they have more available cash. “That’s potentially a force propelling their relatively strong spending today,” Dhiren Patki, a senior economist at the Boston Fed who co-authored the debt analysis, told Axios. Economists have warned that it may be extremely difficult for low and middle-income workers to get out of the credit card debt cycle, especially as the fallout from cuts in Trump’s “big, beautiful bill,” and sweeping tariff plans could hit lower earners the hardest.
