A recent WSJ article discusses the current state of the U.S. economy and highlights the concept of a "richcession," where economic conditions for wealthier Americans feel like a recession even though the overall economy is growing. Despite the economy adding jobs and growing, higher-income individuals have been hit harder by layoffs, struggle to keep up with rising prices due to wage stagnation, and have been affected by a slump in profits that started in the previous year.
The constraints on the rich have led to shifts in their spending behavior, with higher-income households reducing discretionary spending while spending by other households increases. This shift in spending patterns could affect the overall economy, as the top 40% of income earners account for over 60% of total spending.
In summary, the article suggests that while the U.S. economy might not plunge into a recession, wealthier Americans are currently experiencing economic conditions that resemble a recession, which could potentially drag the overall economy.
