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Why Tight Purse Strings By The Wealthiest Americans Is So Worrisome

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Researchers based at Harvard have been tracking spending patterns using credit card data and they're finding the wealthiest Americans are not spending anywhere near as much now than before the start of the pandemic.

That's not true for people at the bottom of the income ladder, who are now spending nearly as much as they did before the coronavirus pandemic.

Nathan Hendren, a Harvard economist and co-founder of the Opportunity Insights research team, said:

"When the stimulus checks went out, you see that spending by lower-income households went up a lot. For higher-income individuals, that spending is still way far off from where it was prior to COVID and it has not recovered as much."

Why's that troubling? Well, lack of spending by 25% of the wealthiest Americans made up fully two-thirds of the total decline in spending since January.
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(Courtesy Track the Recovery)

  • As of early June, spending nationwide was down about 12.7% compared to January. That was up from a downturn of more than 30% in late March/early April.
  • California has seen some of the steepest downturns in spending. As of June 3, spending in the state is down 22.9%, up from a low of 36% in late March.
  • Downturns in the L.A. area have been steeper. Spending here was down 26.1% as of June 3. Lows reached near 37% in late March.



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