There is no such thing as the consumer economy anymore. There is only spending by the rich, and spending by everyone else. In the current recovery, the trajectories of the two are moving in wildly different directions.Sales of luxury goods are soaring, while sales at Wal-Mart are tepid. The affluent cardholders of American Express have rebounded, while Visa and MasterCard have yet to see the same surge. Luxury real estate and mansions are selling again, ranch houses are not.The reasons for the divergence are simple enough: The rich are benefiting from soaring stock markets, cheap money and rapid growth overseas. The rest of America is still weighed down by unemployment, poor credit, falling real-estate values and slow domestic growth.
By Robert Frank, Jan 19, 2011 WSJ
01/19/11 WSJ: If you look at the chart above, showing the DJ Luxury Index and the DJ Consumer Goods Index, the blue line represents the wealthy consumer and the purple the rest. The two lines have grown wider apart since the start of the recession, with the exception a brief tip by the wealthy last summer. There has been no real change in the structure of the economy to suggest the lines will converge again.