Jeremy Strong as Kendell Roy in the hit series Sucession. The rich in the US are experiencing economic difficulties right now. Graeme Hunter/Warner Bros. Discovery
The US is approaching an economic dream scenario in which inflation falls without a sharp rise in unemployment.
But some of the richest people in the country are already feeling worse.
The Wall Street Journal coined the term “rich session” to describe an economic downturn that hits the rich harder.
The US is approaching an economic dream scenario – but some of the country’s wealthiest people are probably not exactly thrilled about it.
US inflation is cooling towards the Federal Reserve’s 2% target and unemployment remains steady at 3.6% despite the Fed’s aggressive rate hikes.
The forecasts are now so far as to assess growth more positively: The economists estimate that the gross domestic product in the USA rose by one percent in the last quarter, according to the Philadelphia Fed.
That doesn’t mean some people don’t feel the pain, though. A different kind of economic downturn is looming on the horizon – a so-called “Richsession„.
High-income earners in the US are experiencing an economic downturn
A Wall Street Journal reporter, Justin Lahart, coined the term earlier this year to describe a downturn that is disproportionately hitting some of the nation’s wealthiest people.
Lahart wasn’t referring to Elon Musk and Mark Zuckerberg – theirs billion fortune dank the AI-driven stock market rally shoots up — but to people whose annual salary is in the top 25 percent of US wage earners. Members of this group earn according to the Bureau of Labor Statistics over $90,000 a year.
Layoffs hit this group particularly hard in the first half of 2023 as high-paying companies from Meta Platforms bis Goldman Sachs Job cuts to save costs.
According to the Atlanta Fed Wage growth for the bottom 25 percent has also risen more sharply over the past 12 months than for the top quartile, while a significant slowdown in luxury brand spending another sign is that the ultra-rich are beginning to worry about an economic downturn.
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For some, the “rich session” is a reason to celebrate, a potential balance in a country where the inequality is greater than in other rich nations and wealth is disproportionately concentrated in the hands of the top one percent.
For others, it’s just a reminder that economic growth is slowing — but not necessarily in the way we expected.
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