Rachel Louise Ensign
Appearances
WSJ What’s News
U.S. Stocks Fall Sharply as Global Economic Outlook Remains Uncertain
So the things that people are stocking up on so far, cars is probably the thing that is clearest. And then they're buying stuff that's similar to cars, things that are expensive but you need. So phones. I talked to an owner of a Verizon store in Williamsburg in Brooklyn. And he said someone came in with an article saying iPhone prices could go over $3,000 with the new tariff.
WSJ What’s News
U.S. Stocks Fall Sharply as Global Economic Outlook Remains Uncertain
So he was buying the phone today. And then we also spoke to folks who were stocking up on the kinds of non-perishable things that folks stocked up on during COVID.
WSJ What’s News
U.S. Stocks Fall Sharply as Global Economic Outlook Remains Uncertain
On one hand, it's a very different economic moment. After the first few months of COVID, people actually had a lot of money. People were sitting at home, not going out. So they had a lot of extra funds to spend on stocking up. Now, you know, some folks are stocking up. But the reality is most Americans don't really have a lot of extra savings. And they've been cutting expenses.
WSJ What’s News
U.S. Stocks Fall Sharply as Global Economic Outlook Remains Uncertain
They're feeling very pinched. So The question is whether those folks who have $1,000 to go buy a new iPhone are going to be balanced out by the people who are just in complete cost-cutting mode.
WSJ What’s News
U.S. Economic Growth Relies on Rich Americans More Than Ever
While everyone else is kind of feeling pretty pinched with prices up so much, affluent people are in a really different situation because they look at the value of their homes, their stock portfolios. And, you know, they're up like 45 percent.
WSJ What’s News
U.S. Economic Growth Relies on Rich Americans More Than Ever
The main reasons for this are two really big factors. First is that in the pandemic, people across income groups saved a lot. And then a lot of it was also government stimulus. And people saved a lot of money across the board. But obviously there's been a lot of inflation and working class and middle class people have pretty much spent most of that extra money, whereas well-off people haven't.
WSJ What’s News
U.S. Economic Growth Relies on Rich Americans More Than Ever
So they're sitting on all this extra savings. And then on top of that, well-off people are more likely to own homes, have stock portfolios, and those have gone up in value tremendously. So while everyone else is kind of
WSJ What’s News
U.S. Economic Growth Relies on Rich Americans More Than Ever
feeling pretty pinched with prices up so much, affluent people are in a really different situation because they look at the value of their homes, their stock portfolios, and they're up like 45%.
WSJ What’s News
U.S. Economic Growth Relies on Rich Americans More Than Ever
So they're spending on all sorts of stuff. Travel is a big category. A lot of folks are like, well, I didn't get to travel for four years. Time is precious and I'm going to splurge now. And then Bank of America has data on spending and they found that the top 5% of households spent more than 10% more on luxury goods abroad compared to a year earlier.
WSJ What’s News
U.S. Economic Growth Relies on Rich Americans More Than Ever
Is that right? These people are often pretty highly educated. They're aware of inflation and they notice it. There was one family in the story where they know that their grocery bill is higher, but buying organic is just important to them and they can afford it. So the bottom line is inflation has had a tremendous impact on people in the bottom 80%.
WSJ What’s News
U.S. Economic Growth Relies on Rich Americans More Than Ever
But the top 10%, they know that it's happened, but they're fine. In fact, they're better than they were before.
WSJ What’s News
U.S. Economic Growth Relies on Rich Americans More Than Ever
Right. Well, that is the risk, right? Because in the data analysis that we have from Moody's Analytics, what they found is that last year, the bottom 80% of earners cut spending and the top 10% increased spending by 12%. So this group is really driving the economy. And if they
WSJ What’s News
U.S. Economic Growth Relies on Rich Americans More Than Ever
start to feel less confident it could be a big hit to economic growth in this country because they're pretty much the only ones who are living large these days that was wsj reporter rachel ensign thank you rachel thank you