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Growth Of The Consumer Class And The Investment Outlook

(Thursday February 6, 2020, 8:30 p.m. ET) - Whatever your views on income inequality, the trend toward a larger and wealthier middle-class is good for consumer spending, which drives 70% of the economy. For investors, that's positively fundamental.

Income distribution data in this chart won't answer all the complex questions surrounding income inequality but are useful in understanding this key fundamental economic trend, which drives the investment outlook.

The three lines show the distribution of household income at 20-year intervals: 1978, 1998, and 2018. The black line is evidence that growth in the number of households with $100,000 to $149,999 in income accelerated over the last 20 years, and sharply from 1978.

The proportion of U.S. households with between $50,000 and $74,999 in income dropped because there are many more households making $100,000 to $149,999 and up, changing the character of the middle class. The U.S. had fewer middle-income households in 2018 because we had more higher-income households. In addition, a percentage of the total number of U.S. households in the lowest income brackets declined.

(U.S. Census Bureau income estimates are based solely on income before taxes and do not include non-cash benefits such as food stamps, Medicare, Medicaid, public housing, and employer-provided fringe benefits.)


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Nothing contained herein is to be considered a solicitation, research material, an investment recommendation or advice of any kind., and it is subject to change without notice. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. The material represents an assessment of financial, economic and tax law at a specific point in time and is not  a guarantee of future results.


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This article was written by a professional financial journalist for NPA Financial Services, Inc. and is not intended as legal or investment advice.

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