Median income growth in the US has been relatively flat since the end of the recession. However, owners of stock have profited from rapid growth in stock prices since 2009. Around 90% of the growth in personal consumption between 2009 and 2012 has been generated by those in the top 20% income bracket. Most of that growth has been by the top 5%. In 1992 28% of personal consumption expenditures came from the top 5%. The top 5% accounted for 38% of PCE in 2012.
The hollowing out of the middle class has impacted the retail market dramatically. Chains like Sears and JC Penny which catered to the middle class are struggling. Upscale retailers like Nordstroms are doing very well and so are chains like The Dollar Store which target consumers in the low income brackets. One of the problems with this trend in consumption is that spending by the top 5% is dependent upon the performance of the stock market. That will increase the volatility of consumption which accounts for around 70% of the US economy.
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