The market has been using consumer resilience as a supporting signal for a lot of things at once: rate cut timing, a soft landing, consumer discretionary earnings. In the aggregate, that resilience is real. What the aggregate hides is who "the consumer" actually is right now, and that gap matters because it feeds directly into earnings expectations, not just how people happen to feel about their finances.
Households earning over $125,000 a year have seen spending climb more than 7% in real terms since 2023. Middle income households are up about 3%. Households earning under $40,000 have gained barely over 1%. Investors already know spending skews toward higher earners. What's easy to underweight is how outsized that group's influence has become on the aggregate number. Adjust for their outsized share and the story of a resilient consumer gets noticeably thinner.
Here's where it turns into a market question rather than a social one, and the numbers behind it are more direct than you'd expect. Moody's Analytics estimates the top 10% of earners now account for about 49% of all U.S. consumer spending, the highest share in data going back to 1989. Separately, the top of the wealth distribution owns the large majority of U.S. stock market value. High earners and high wealth households aren't the same group by definition, but in practice they overlap heavily, and that overlap is the story. Asset prices go up, a large share of the households driving spending see their net worth rise and their financial footing get more secure, so they spend more, that spending shows up in earnings, and those earnings support the market that made them wealthier in the first place. Consumer strength and market strength aren't really two separate signals confirming each other. They're closer to the same bet, counted twice.
That loop has direct earnings implications, though the picture varies more than a clean split suggests. Companies leaning on higher income spending are riding real strength right now. Companies more exposed to middle and lower income households are selling into a segment that may already be compensating in other ways, through debt, thinner savings, or simply trading down and delaying purchases, even if some of those companies are still holding up fine for now. Total household debt just hit $18.8 trillion, a new high, and auto loan delinquencies have climbed to levels not seen in years even with unemployment low. That's not proof spending is about to break, but it is a sign of real stress building under a headline number that still looks fine. It's costs outrunning paychecks for a meaningful share of borrowers, and pressure like that can stay hidden for a while before it shows up in a company's earnings, which is exactly why it's easy to miss until it isn't.
Which is really the investor takeaway here. Companies selling into the top of the income distribution may keep surprising to the upside for longer than the broad "consumer" narrative implies. Companies and index constituents that look fine on paper because they're blended in with that strength may be carrying more softness underneath than the aggregate lets on. The same headline consumer number can be masking both.
None of this means the consumer data is wrong. It means the market may be underwriting a soft landing off a number that's more concentrated, and more self reinforcing, than the aggregate suggests. The real question isn't whether the consumer is resilient. It's whether the headline number is telling us where the risk is actually hiding, or just where it hasn't shown up yet.