American consumers are spending again – but not all of them, say Nick Timiraos and Kris Hudson in The Wall Street Journal. Since the crisis, incomes for all but the top earners have been flat or falling, while the credit squeeze has reduced the middle classes’ access to debt.
Quantitative easing, meanwhile, has lifted assets held mostly by the rich. So average spending among the top 5% of households grew by 12% in inflation-adjusted terms between 2009 and 2012. Consumption by the other 95% declined by 1%. The top 5% now account for 30% of consumer spending, up from 23% in 1992.
A two-tiered economy is emerging, with the luxury sector booming and the mid-market floundering. Retailers such as Target and JC Penney are struggling, but Nieman Marcus is flourishing. It’s the same story in hotels and groceries. Many firms are now reorientating themselves towards high-end households, deepening the divide in America.