{"id":189344,"date":"2025-09-29T07:52:11","date_gmt":"2025-09-29T07:52:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/189344\/"},"modified":"2025-09-29T07:52:11","modified_gmt":"2025-09-29T07:52:11","slug":"us-economy-bucks-recession-warnings-on-back-of-high-income-spenders","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/189344\/","title":{"rendered":"US economy bucks recession warnings on back of high-income spenders"},"content":{"rendered":"

There have been recession fears<\/a> brewing for a while now, and recent surveys show consumer sentiment<\/a> is down. Despite the economic warning signs, some recent data points that indicate economic growth, including the Atlanta Federal Reserve\u2019s GDPNow<\/a> model.<\/p>\n

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The GDPNow model estimates 3.9% growth in the third quarter as of Friday, an increase from 3.3% from earlier in the month. Releases from the United States Census Bureau of Economic Analysis and the National Association of Realtors show that decreases in third-quarter gross private domestic investment were \u201cmore than offset\u201d by increases in real personal consumption expenditures and net exports during the same period.<\/p>\n

The Commerce Department said<\/a> on Friday that personal consumption expenditures rose 0.6% in August, or, when adjusted for inflation, 0.4%. Physical items in particular went up by 0.8%. In addition, new home sales surged<\/a> by 20%, the Census Bureau said.\u00a0<\/p>\n

The Atlanta Fed noted that the GDPNow is not an official forecast of the Atlanta Fed \u2014 instead, it\u2019s a running estimate of real growth in the GDP. But others have been optimistic about these indicators as well, including Tom Barkin, the president of the Federal Reserve Bank of Richmond<\/a>.<\/p>\n

High income consumers driving better indicators<\/p>\n

Speaking on Friday at the Peterson Institute for International Economics, Barkin said recent data showed consumers resumed spending over the summer, especially those with higher incomes.\u00a0<\/p>\n

\u201cThe underlying dynamics for businesses remain healthy too,\u201d Barkin said. \u201cOf course that differs by sector, with data centers and power generation booming and residential and agriculture struggling. Second quarter earnings were strong, and stock prices keep climbing. Uncertainty seems to be coming down as the path for government becomes clearer.\u201d<\/p>\n

He pointed to the bank\u2019s CFO Survey<\/a>, which showed that financial decision-makers\u2019 outlooks on the United States economy improved in 2025\u2019s third quarter. Still, the survey showed people still have concerns over the effect tariffs<\/a> will have on prices.\u00a0<\/p>\n

\u201cOur recently released CFO Survey<\/a>, which we run in collaboration with the Atlanta Fed and Duke University, found that business optimism has ticked back up near the levels they hit at the end of last year, the highest since 2021,\u201d Barkin said. \u201cAll of that bodes well for the economy.\u201d<\/p>\n

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Mark Zandi, chief economist at Moody\u2019s Analytics, said Friday in an interview on CNBC<\/a> that much of the spending being seen is from \u201cwell-to-do high-income high-net-worth households that are seeing their stock portfolios are up.\u201d<\/p>\n

\u201cThe economy\u2019s very vulnerable if the stock market does turn south, for whatever reason,\u201d Zandi told CNBC. \u201cPeople start seeing red on their screens and not green on their screens and the savings rate goes up not down. In the current context of no job growth, that\u2019s recession.\u201d<\/p>\n

Chris Zaccarelli, chief investment officer for Northlight Asset Management, said in a note that the economy has continued to \u201csurprise to the upside.\u201d<\/p>\n

\u201cDespite the negativity captured in surveys and expressed by commentators, actions speak louder than words and consumers continue to spend,\u201d Zaccarelli said.\u00a0<\/p>\n

\t\t\t\t\tCole Lauterbach ( Managing Editor)
\n\t\t\t\t\t\t\tcontributed to this report.<\/p>\n","protected":false},"excerpt":{"rendered":"There have been recession fears brewing for a while now, and recent surveys show consumer sentiment is down.…\n","protected":false},"author":2,"featured_media":189345,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,101],"class_list":["post-189344","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/189344","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=189344"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/189344\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/189345"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=189344"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=189344"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=189344"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}