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There is an idea so contagious in economic circles right now that it might as well represent all that is awry about the U.S. economy. You’ll find it in every think piece about the so-called “K-shaped economy”, or in deep dives of consumer spending. You might even have even happened upon it in the print of financial journalism’s most prestigious publications. And yet, it might be patently false that “the top 10% of U.S. households represent over half of consumer spending.” At least, that’s what one economist argues. Where Did the Stat Originate? The stat has become so intoxicating to traders, investors, and some armchair economists; even to the point that it has been repeated without a lot of further consideration. However, it’s actually the product of a report from Moody’s Analytics, which was widely covered. Zandi makes the case that the top 10% of American consumers represented 49.2% of total spending in the second quarter of 2025, which was the highest level seen since the series began in 1989. Why Is It Controversial? However, this stat has begun to collect a row of reactions. Including, among others, that it’s simply not right. UC Berkeley Assistant Professor and Post-Doctoral Fellow Antoine Levy has stirred the pot in a brief but detailed thread on X (formerly Twitter), taking aim at the ultra-wealthy dominating spending. “Anyone familiar with economic statistics should intuitively feel it must not be right,” Levy said. “And indeed, it’s (mostly) not.” Levy, who counts “the interaction of public policies, housing markets, and spatial mobility” as his focus area, says that it would be impossible for the top 10% of households to represent 50% of consumption, as they “do not even receive 40% of disposable income.” He then picks apart the technical deficiencies of Moody’s methodology and wraps up by calling their work “an overestimate” and “extremely unlikely from just basic accounting relationships.” In a comment to TheStreet, Levy adds, “Broadly my sense is that this methodology is not picking up actual variation in consumer spending patterns (certainly not at quarterly frequency, given the imputation method).” He points to the 50% level as being “completely at odds” with the measured distribution of “personal income, savings, and consumption expenditures” collected by the Bureau of Labor Statistics (BLS) and Bureau of Economic Analysis (BEA). “Consumption is more equal than disposable income,” Levy finishes. “And disposable income itself is not that unequally distributed.” So if not 50%, then what? Levy says that the top 10% of households receive between 35% and 40% of disposable income and save between 20% and 25% of that; that’s higher than the national average savings rate of about 7%. Using those figures, he lands on 35%. Still high, but by no means the more dramatic 50% figure which has become a favorite talking point among the money-minded. Controversy Begets Controversy However, Levy’s two cents have also attracted greater discussion about the figures rendered. Matthew C. Klein, who worked at Bloomberg, the Financial Times, and Barron’s before starting his own subscription-supported publication called The Overshoot told TheStreet that Moody’s numbers are “just wrong.” “The Bureau of Economic Analysis is the official government agency in charge of measuring personal income, consumer spending, and GDP,” Klein said. “According to them, the top 10% of U.S. households (by disposable income) have consistently been responsible for only about 20% of all consumer spending in 2004-2022.” Klein points out that Moody’s data source itself, the Federal Reserve’s Distributional Financial Accounts, did not even track consumption, making Levy’s argument “plausible.” However, there are naysayers (albeit, mostly anonymous X hecklers) to Levy’s criticisms. Among their contentions are how business spending is inadequately captured (since it results in losses which offset income), the wealthy’s access to lending products (which would open up alternative means to consume without necessarily increasing income), and the difference between “consumption” and “spending.” TheStreet reached out to various sources, including Moody’s Analytics, for comment on the discussion. At the time of publication, we had not heard back.
