The wealthy are spending less, leading to some concern that they are further stalling an economic recovery. Gross domestic product rose 1.5 percent in the second quarter, down from 2 percent in the first quarter and 4.1 percent in the last quarter of 2011. Consumer spending makes up nearly three-quarters of GDP, but the wealthy are keeping their wallets on lockdown.
Spectrem Group reports that confidence among millionaires has fallen to its lowest level in nine months and a new report from Thomson/Reuters says consumer confidence among those who earn $75,000 or more has dropped 20 percent since 2011.
Retail spending is not broken down by demographics, but experts are noticing that wealthy buyers are holding back. Scott Hoyt, a Moody's Analytics economist who tracks consumer spending, told USA Today that retailers who specialize in high-end merchandise, especially jewelry, were hurt more by the recession than discount stores.
While it makes sense that consumers would pull back on discretionary spending during an economic slowdown, the wealthy can afford to continue buying. Yet, many are saying they're either spending less or adopting a holding pattern when it comes to spending – not buying more or less, just waiting to see what happens with the economy.
Has your pattern of spending changed and do you believe the economy will pick up or remain sluggish?
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