The divide between wealthy Americans and the rest of the population has continued to widen, with new economic data showing that high-income households now control a far larger share of the nation’s wealth than they did decades ago.
According to figures from the Federal Reserve, households in the top 10 per cent of earnings owned 32 per cent of total US wealth in 1989. By 2025, that figure had surged to 68 per cent.
Economists describe the trend as a “K-shaped economy,” where affluent households continue to experience rapid financial growth while middle- and lower-income Americans struggle to keep pace.
The gap has become even more pronounced over the last three years following the inflation crisis, with wealth growth increasingly tied to ownership of assets such as homes and stocks.
Data showed that the net worth of the richest one per cent of Americans increased by 30 per cent within the last three years, while the middle 40 per cent recorded less than 10 per cent growth during the same period.
Analysts say housing, stock market gains and inflation have played major roles in deepening the imbalance.
High-income earners own more than half of the total value of homes in the United States, benefiting from soaring property prices over recent years. In contrast, lower-income Americans have struggled to access homeownership as mortgage rates climbed sharply.
Reports indicate that the bottom 20 per cent of earners own only about three per cent of the nation’s total home value.
The disparity widened further after the COVID-19 pandemic, when historically low mortgage rates allowed homeowners to refinance and unlock an estimated $430 billion in home equity, giving wealthier households an additional financial cushion.
The stock market has also contributed significantly to the divide. More than 75 per cent of America’s financial assets, including stocks, are controlled by the top 20 per cent of earners, while the wealthiest one per cent alone own over a quarter.
Over the past three years, the S&P 500 gained more than 86 per cent, while cash savings delivered returns of less than one per cent annually on average.
Inflation has also affected income groups differently. Lower-income households spend a larger portion of their earnings on essentials such as food and housing, sectors where prices have risen sharply compared to luxury goods and services more commonly consumed by wealthier Americans.
Between 2005 and 2023, consumer prices reportedly increased by 57 per cent for the bottom 20 per cent of earners, compared to 46 per cent for the top 20 per cent.
Consumer spending patterns also reflected the growing pressure on lower-income households. Americans earning below $40,000 annually began cutting spending in early 2023 and only stabilised by late 2024.
Over the same three-year period, inflation-adjusted spending among low-income households rose by just 1.3 per cent, compared to 7.6 per cent growth for households earning at least $125,000 yearly.
Experts say the strong spending power of wealthy Americans has continued to fuel demand across the economy, contributing to persistently high prices.
The report concluded that affluent households are not only earning more money but also benefiting from stronger opportunities to expand their wealth through investments and property ownership, while lower-income Americans remain largely excluded from those wealth-building channels.
