Moody’s Analytics chief economist Mark Zandi said Tuesday the U.S. economy will likely avoid a recession if the wealthiest individuals continue to spend at the current rate.
In a post on the social platform X, the chief economist highlighted updated charts showing spending levels by income group, saying the new data suggest “the U.S. economy is being largely powered by the well-to-do.”
“As long as they keep spending, the economy should avoid recession,” Zandi continued, “but if they turn more cautious, for whatever reason, the economy has a big problem.”
Zandi has warned of the possibility of a recession as recently as Sunday.
“There is an uncomfortably high 48% probability that the U.S. economy will suffer a recession in the next 12 months,” Zandi wrote in a post on X, citing Moody’s new leading economic indicator.
“It’s less than 50%,” Zandi continued, “but historically, the probability has never gotten this high, and a recession has not ensued.”
In his Tuesday post, Zandi said the new spending data make it clear why Americans are unhappy with the state of the economy.
“Looking at the data, it’s not a mystery why most Americans feel like the economy isn’t working for them,” Zandi wrote.
“For those in the bottom 80% of the income distribution, those making less than approximately $175,000 a year – their spending has simply kept pace with inflation since the pandemic,” he wrote. “The 20% of households that make more have done much better, and those in the top 3.3% of the distribution have done much, much, much better.”
