Global Research Unlocked Spiffy new bag for some, shaggy couch for others – latest wage and spend trends
Nov 24, 2025
David Tinsley, Senior Economist at the Bank of America Institute, and Ashley Wallace, Head of the EMEA Consumer Discretionary Team at BofA Global Research, dive into the latest trends in employment and luxury spending. They discuss the notable wage growth gap between lower and higher income earners, emphasizing challenges for low-income consumers. Meanwhile, luxury spending is experiencing a resurgence, particularly in fashion and jewelry. The guests explore how stock market trends may influence future luxury demand and the resilience of high-income shoppers amidst potential market fluctuations.
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Wage Growth Split Widest In A Decade
- Bank of America Institute payroll estimates show payroll growth steady at 0.5% y/y in Sept and Oct.
- After-tax wage growth is much stronger for higher-income households (3.7%) than lower-income (1%), the largest gap in 10 years.
Discretionary Spend Diverges By Income
- Higher-income households drove stronger card spending growth (2.7% y/y) versus 0.7% for lower-income in October.
- Discretionary categories like restaurants, furniture, lodging and clothing show especially large gaps.
Online Spending Is Broadly Robust
- Online retail spending is strong across both lower- and higher-income households with little gap.
- Value and demographic trends likely drive broad online adoption despite other discretionary differences.