The US is experiencing both a wealth boom and new price pressures. Building AI infrastructure is driving investment that is expected to surpass the previous telecom boom, as well as national projects such as rail and highway construction. Rising stock prices are boosting household wealth, but the benefits are unevenly distributed.
The share of the top 1% of US households has grown the fastest. The Federal Reserve data, cited by Reuters, covers the period from the end of Joe Biden's administration to the second quarter of 2026. They show that from the 99th percentile down, the share of total national wealth increases more slowly.
At the same time, the remaining 99% have not been completely left out of the growth. Total household wealth increased by 16.5%, or about $26 trillion, over the period under review. Less than half a trillion dollars of this increase went to the poorest half of households, but their wealth also grew by about 10%.
Consumption is growing, but inflation is eating up some of the growth
Spending on goods and services continues to increase and, on a nominal basis, is growing faster than before the pandemic. But when inflation is taken into account, real consumption is moving at about the same pace as before the pandemic.
The difference between nominal and real spending shows how much of the extra money spent is due solely to higher prices. Economists see a mixed picture in so-called “K-shaped” consumption, in which richer households maintain strong spending while poorer ones try to maintain their previous standard.
Studies by major banks and the Federal Reserve in Richmond suggest that consumption among lower-income households is holding up for now. Data from the Federal Reserve in New York also shows no signs of a credit crunch among poorer Americans. But that doesn’t mean the pressure on budgets has disappeared.
Gasoline and ground beef prices are among the costs that Americans are feeling most directly. Inflationary pressures have been building over the past 20 months or so, driven by import tariffs, energy costs linked to the Iran war and an investment boom around artificial intelligence.
Hourly wage growth and the consumer price index are moving at roughly the same pace. This has allowed households to maintain their spending but has not significantly improved their purchasing power.
Sources: reuters.com, investing.com, malaysia.news.yahoo.com