The U.S. middle class, long considered the backbone of consumer demand and economic stability, is now increasingly stretched and frustrated as broader economic resilience hinges on the spending power of the wealthiest Americans.
In an article for the Washington Post published Wednesday, Navy Federal chief economist Heather Long argued that only a handful of “superstar” companies and wealthy consumers are propping up an otherwise fragile economy, since they’re the only ones able to absorb mounting tariff‑induced costs.
That, she noted, leaves many middle‑income Americans feeling the squeeze. This includes reduced overtime, lost bonuses, rising delinquencies on credit cards and auto loans and missed student loan payments.
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Long wrote that middle‑income Americans are "financially tapped out."
She added that notable job cuts have appeared in manufacturing, education, retail, construction and government, while only health care continues to add jobs.
The article noted: "Even more alarming is how reliant the economy has become on spending binges by the richest Americans. The top 10 percent of earners now drive about half of spending, according to Moody’s Analytics, up from 36 percent three decades ago."
The author added: "These people will determine if the U.S. economy avoids a recession. These are households earning about $250,000 or above, and they are largely doing just fine, buoyed by strong stock market gains, mansions and rental properties that have shot up in value in recent years, and a rebound in business dealmaking. The wealthy continue to spend on lavish vacations, parties and events, and that masks the strain that many middle-class and moderate-income families are experiencing."
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Long further explained that consumer spending has decelerated sharply, while inflation‑adjusted growth that once hovered near 3% has dropped to about 1.4% in Q2.