But that hasn’t stopped the wealthy from spending. In fact, wealthy consumers who make at least $250,000 per year account for nearly 50% of all spending, a record since the government started tracking the data in 1989, a recent report from Moody’s Analytics shows. 

Despite inflation and other economic headwinds that have caused many consumers to pull back, the rich are still comfortably spending on vacations and luxury goods. Rich Gen Zers and millennials who are dual-income-no-kids (DINKs) have seemingly led the charge on discretionary spending, according to a November 2024 Harris Poll survey. They’re shelling out on luxury and premium experiences in dining, travel, and personal development products. 

Between September 2023 and September 2024, high-income individuals increased their spending by 12%, while working-class and middle-class households lowered their spending, according to Moody’s, which simply calls this shift the “wealth effect.”

“Wealthier households are financially more secure and thus more able and willing to spend from their income,” Moody’s chief economist Mark Zandi wrote in the Feb. 18 note. “That is, they save less than they would otherwise.”

But the fact that the wealthy make up a majority of discretionary spending in the U.S. makes the economy unusually reliant on a small sliver of the population, Zandi told The Wall Street Journal. 

What happens when the wealthy are in control of spending

Some economists argue the outsized influence of wealthy individuals doesn’t make the U.S. economy fragile in and of itself. But “an overreliance on high-income consumers can lead to problems if economic policies or market conditions significantly alter their spending behavior,” Peter C. Earle, senior economist at the American Institute for Economic Research, told Fortune. 

Even if high-income earners were to significantly reduce their discretionary spending, they would likely reallocate that money into savings, investments, entrepreneurship, or business expansion, which still contribute to economic growth, Earle said. But there would be a short-term hit to the consumer economy, especially for luxury goods, high-end retail, travel, and entertainment, he added. 

“Long-term prosperity hinges on savings, investment, and gains in productivity—none of which are necessarily diminished when wealthy individuals save more instead of spending,” Earle said. 

The trouble with relying on the rich

Bob McNab, chair of the department of economics at Old Dominion University, however, sees the trend as “troubling for several reasons.”

Higher income households are less likely to spend their last dollar earned than lower income households, making the group’s spending more difficult to influence by monetary or fiscal policy, McNab said. 

“Simply put, if you give $1,000 to a lower-income household, they are likely to spend most—if not all—of it, while a higher-income household is likely to spend only a fraction and save the rest,” he explained. 

Being reliant on high-income earners can also lead to “more pronounced swings” in economic activity, McNab said, because these households can easily cut discretionary spending during a slowing economy. This, in turn, “exacerbates the economic downturn,” he said.

McNab also flagged deteriorating consumer sentiment as a reason to be concerned about the wealthy controlling spending in the U.S.

“Once higher income earners believe a recession is coming, they will change their consumption behavior and, as result, increase the likelihood of a recession,” McNab said. “It becomes, in effect, a self-fulfilling prophecy.”