Washington Post: Recovery = waiting for rich people to spend some money [View All]

[Hannah Bell]

Waiting for Deep Pockets to Open
Recovery May Well Wait on the Wealthy to Step Up Their Spending

Washington Post Staff Writer
Wednesday, September 9, 2009

In this new era of frugality, well-to-do shoppers have gone into hiding and stowed away their splashy logos. But they may hold the key to a consumer recovery.

Affluent shoppers are the most important segment of consumer spending, which in turn drives the national economy. The top 20 percent of the nation's households -- with income of at least $150,000 -- account for 40 percent of all spending, according to government data. That makes them a crucial spoke to any turnaround.

"Unless these people turn up, a lot of companies won't turn up," said Milton Pedraza, founder of the Luxury Institute, a consulting firm. "When they are not spending, it definitely impacts all of us in a negative way."

Conditions are beginning to improve for the well-to-do. The recent runup in the stock market and signs of stabilization in real estate prices -- the two sectors with the most influence over wealthy consumers' balance sheets -- are setting the stage for their return. Already, wealthy shoppers say they are cutting back less and don't worry about money as much as other demographic groups, according to a recent Gallup report.

http://www.washingtonpost.com/wp-dyn/content/article/2009/09/08/AR2009090803519.html


golly gee, glad conditions are beginning to improve for the well-to-do!

you probably didn't realize the economy was dependent on the top 20% purchasing $300 ball gowns, did you?