The stock market hits new highs. Luxury brands shatter earnings expectations. Delta airlines sells more premium seats than coach. And yet… Some people postpone medical care. Food bank lines stretch around city blocks. Car repossessions have spiked. So…is the economy booming or breaking? Yes. There’s a growing divide in how Americans experience the economy and it's largely shaped by income. According to JPMorgan’s latest Cost of Living Survey, wealthier households feel optimistic about their finances. Many plan to spend more in the year ahead.1 Meanwhile, lower-income households are far less confident. Nearly60%of high earners said their monthly bills feel easier to manage than a year ago. Only30%of lower-income consumers said the same.2 And this gap isn’t just showing up in surveys. It’s playing out across corporate earnings reports.
In other words, this isn’t just a feeling.The economy really is moving in two directions. So, what’s behind the split? It comes down to who owns what, and who feels what. Over the last five years, home values jumped over49%.10The S&P 500? Up91%. Altogether, Americans have gained more than$55.6 trillionin wealth.11 But those gains didn’t reach everyone. Thewealthiest 10% of Americanshold nearly9 out of every 10invested dollars.12So when the market rallies, that group rides the wave. They spend more. They feel confident. Meanwhile, the rising cost of basics (groceries, gas, rent) hitslower- and middle-income householdsthe hardest. Even small price hikes can derail a tight budget. And with credit still expensive, borrowing isn’t a safety net. It’s a burden. In other words, we can almost picture the economy like two escalators running side by side. One carries wealthier Americans higher, lifted by stock market gains and confident spending. The other pulls many middle- and lower-income households down, strained by rising prices and a weaker job market. The result? One economy, two realities. In a two-track economy, the real question isn't which escalator you're on today - it's how to prepare for what might come next. That's where thoughtful planning comes in. It helps you navigate both the ups and downs while staying focused on what matters most: your goals. This is a natural time to check in and make sure your strategy still fits. A lot can shift in a few months, and I'm here if you'd like to talk through any changes on your mind. |
Warmly, Daniel Ruben, MD, MPH, MBA (818) 483-6611
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P.S. After 43 days, the government shutdown ended November 12th with a deal through January 30th.13More budget battles are likely before then. It's a good reminder to think long-term and focus on what you can control. |
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