Financial Briefs

More Articles  Printer Friendly Version

 

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.)


The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is a market-value weighted index with each stock's weight proportionate to its market value. Index returns do not include fees or expenses. Investing involves risk, including the loss of principal. Past performance is no guarantee of future results.  Return and principal value of an investment will fluctuate, and when redeemed, may be worth more or less than their original cost. Performance statistics quoted here may be lower or higher now.

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.


Email this article to a friend


Index
Test Your Knowledge Of Urgent Wealth Management Issues
Neither Red Nor Blue, Tax Planning Is All About The Green
Urgent Year-End Tax Planning Moves
Investors Beware: SEC Is Struggling Amid Covid
Food For Thought
Starting A Business? Plan To Succeed
Stock Market Rally Broadened In Past Three Months
3Q 2020 Wealth Management Report
Income, Estate And Gift Tax Hikes Ride On Election Results
2020 Year End Tax Planning For Retirees, Business Owners, And Families
Set Your Financial Priorities Right Now
Poor Bond Outlook May Herald A New Stock Valuation Regime
Family Wealth Transfer Opportunities Spawned By Covid
A Five-Point Covid Diagnostic For Family Wealth Management
Private Wealth's Perfect Storm
Confronting Mortality's Details

This article was written by a professional financial journalist for Rekow Management, LLC and is not intended as legal or investment advice.

©2020 Advisor Products Inc. All Rights Reserved.