Bank of America data shows high-income households account for over a third of nonessential spending, widening economic disparities.
The top 10% of US pretax earners accounted for 36.2% of average annual discretionary spending in 2023, nearly matching the combined total of the bottom 70%. This trend highlights a K-shaped recovery, where wealthy households drive demand for nonessential goods and services while lower-income groups focus on essentials like groceries and fuel.
The disparity has persisted since 2023, with broader economic effects observed in housing markets and credit scores. High-income consumers allocate a larger share of spending to discretionary items, contrasting with lower earners who prioritize necessities and remain vulnerable to inflation.
Luxury spending growth has been strongest among the wealthy, further amplifying the divide. The data underscores structural imbalances in consumer behavior and economic resilience across income brackets.