Marketplace All-in-One As many shoppers scrimp and stress, the wealthiest splurge
Aug 18, 2025
Lydia Clark, owner of DTLA Cheese, shares her insights as she faces tariff challenges that impact cheese pricing during peak import seasons. The discussion reveals a growing divide in consumer spending, where wealthier households are splurging while lower-income Americans cut back. Clark highlights the resilience of small businesses in this economic landscape and reflects on the joy of bringing cheese to customers despite rising costs. The impact of corporate earnings and global energy dynamics also adds depth to the conversation.
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Wealthy Households Are Driving Spending
- High-income households now account for a growing share of consumer spending, driving overall retail resilience.
- Lower-income households carry more credit card debt while top earners have spare credit and other income sources to keep spending.
Pessimism Is Now Broad-Based
- Despite higher spending by wealthy households, all income groups are now similarly pessimistic about the economy.
- If high-income consumers pull back, consumer spending and GDP growth could falter quickly.
Earnings Are A Bright Spot
- Q2 corporate earnings surprised to the upside, led by tech and better-than-expected banks.
- Strong corporate results can dampen layoffs and offset some negative effects of tariffs on consumers.