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Wealthy Americans Growing Cautious About How They Spend.

Deep-pocketed Americans have long powered the post-pandemic U.S. economy with robust spending habits, but the splurging could be coming to an end.

The latest round of corporate earnings reports, according to a CNN report, says there’s evidence that wealthy Americans are pulling back.

The British luxury retailer Burberry, for example, recently reported that profits plunged 40% in the latest fiscal year, with sales in the Americas falling 12%. “Executing our plan against a backdrop of slowing luxury demand has been challenging,” Jonathan Akeroyd, Burberry’s chief executive, said in a statement.

LVMH Moët Hennessy Louis Vuitton, meanwhile, said last month that demand for high-end liquors has declined sharply in the U.S., leading to high inventory levels.

And Walmart, which historically caters to lower and middle-income Americans, said last week its latest quarterly gains were “primarily driven by upper-income households” — or those making more than $100,000 a year.

U.S. household wealth surged in recent years, but those gains have been largely contained to those Americans older than 54. They hold more than 70% of U.S. household wealth, according to Fed data.

U.S. economic growth accelerated at a brisk pace in 2023, but momentum has slowed a bit of late. April’s employment and retail spending figures were weaker than expected. High interest rates continue to weigh on the overall picture, especially a stagnating housing market.

The generational story of who is struggling — and who isn’t — can be told in part by new research from the Federal Reserve Bank of New York. It finds that more than 15% of Gen Z credit-card holders are maxed out. Those rates are substantially lower for Gen X (9.6%) and baby boomers (4.8%).

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