US middle class keeps shrinking as wealthy pull further ahead, Equifax data show
Multigenerational issue
Every generation posted a lower index reading this quarter.
Millennials fell hardest, down 1.2% quarter over quarter to an average of 58.1, and this cohort also logged the steepest rate of significant point drops of any age group as they move through peak earning years without the inherited wealth cushion available to younger consumers. Millennials also make up the largest share of Strivers, at 7.59% of the total population, driven mainly by thin asset holdings.
Generation X slid 0.8% to 60.3, squeezed between peak career-stage debt and rising costs for essentials. Generation Z edged down just 0.1% to 58.9, though the cohort showed the widest swings of any generation, with 11.73% of Gen Z consumers moving upward, a trend Equifax links to proximity to family or community wealth safety nets. Boomers and older consumers remained the most resilient tier, dipping only 0.2% to 64.3, with as much as 69% of that population holding steady within their index range. Boomers also account for 3.80% of the total population within the Thriver segment, the largest share of any generation in the affluent tier.
Beneath the headline figures, Equifax pointed to a widening reliance on credit to bridge the gap between spending and savings. Personal savings fell to 745.6 billion dollars this quarter, less than half the 1,606 billion dollars recorded in mid-2021, even as overall consumer spending climbed to nearly 16.8 trillion dollars and bankcard balances hit a fresh high. Inflation ticked up to 3.3% during the quarter.
Consumer sentiment, meanwhile, moved in the opposite direction to the underlying data, rising slightly to a reading of 55.4 even as household financial strain deepened, a gap Equifax says illustrates why sentiment surveys alone can obscure the real state of consumer finances.
