Affluent Americans Drive US Economy Rebound in 2024, and the Importance of Their Contributions to Economic Growth
In 2024, the US economy saw a remarkable recovery from the COVID-19 lockdown slump, with renewed optimism across the nation. The Dow Jones Industrial Average reached unprecedented highs of 37,903, while the Nasdaq composite also recorded its highest point at 15,605. This positive performance in US equity markets was a clear indication that the economy was moving in the right direction.
The driving force behind this growth in 2024 was affluent Americans, rather than the middle-class segment. Affluent Americans invested heavily in government bonds and received higher yields compared to others in their respective year. This trend of affluent Americans leading economic growth has caused a delay in rate cuts by the Fed.
As for affluent Americans’ economic benefits, they experienced rising home values and income growth across various sectors such as government bonds, commodities, and stocks. This success has contributed to what is known as “the wealth effect,” where increasing home and stock values boost confidence and encourage higher spending. Despite expectations of an economic slowdown due to these gains, affluent Americans’ prosperity remains a crucial tailwind for US economic growth.
Overall, if affluent Americans continue to make money at such significant rates, it will be critical for ensuring economic stability and growth. Without their contributions to driving the US economy forward, there is a risk of an imminent crash.
