Mill Street Research @millstreetresearch.com · 16d A big reason spending growth has held up much better than income growth is a rapid decline in saving from income. The personal saving rate has steadily dropped, now at 3.0%, near the lowest levels on record (except for 2022). This boost to spending naturally is not sustainable long-term.
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Note that capital gains from assets are not included in US personal income, and higher-income households are likely spending some of the very large capital gains they have in stocks and houses in recent years, as well as their tax cuts. This has exacerbated the "K-shaped economy" lately.