The Price of Inequality

This chart from the Financial Times illustrates how US consumption has become increasingly concentrated. The top 10% of earners now account for nearly half of all consumer spending, while the bottom 80% has steadily lost share over the past three decades.

From a macro and investor perspective, this matters: when demand is driven by a narrow group, the economy becomes more sensitive to asset prices and confidence at the top, while social and political tensions tend to rise in the background.

Time to revisit Joseph Stiglitz’s The Price of Inequality.