The Bureau of Labor Statistics published its 2024 consumer expenditures report, showing that the highest-earning 20% of U.S. households outspent the lowest-earning 20% by wide margins in housing, transportation, and personal insurance and pensions. The data also showed that lower-income households devoted a larger share of their total spending to food and healthcare than their higher-income counterparts.

According to public records, households in the top income quintile had an average pre-tax income of $264,510 in 2024, compared with $16,658 for households in the bottom quintile. The top 20% spent about three times as much on housing costs, about five times as much on transportation, and roughly 38 times as much on personal insurance and pensions as the bottom 20%. Despite the far greater dollar amounts spent by wealthier households on housing, lower-income households allocated a higher share of their total budgets to housing costs. Lower-income households also allocated a higher share of their spending to food and healthcare than higher-income households.

The BLS consumer expenditures data captured spending in 2024, a period in which the U.S. economy has been characterized as K-shaped, with higher-income individuals performing better than others and accounting for a larger share of consumer spending. Wage growth for lower-income Americans has slowed since its peak in 2022, and some lower-income households have been modifying their budgets in response to economic conditions.

An October survey by the Consumer Finance Institute at the Federal Reserve Bank of Philadelphia found that Americans earning less than $40,000 were more likely to consciously reduce their spending than those earning at least $150,000. About 28% of respondents earning less than $40,000 cited changes in circumstances, such as employment or household size, as the main factor affecting their spending decisions. Just under 50% of low-income respondents said that changes in the costs of goods and services were affecting their spending approach.

Atsi Sheth, chief credit officer at Moody's Ratings, said, "As we entered 2026, slowing job and wage growth, combined with the accumulated impact of a few consecutive years of rising cost of living was already weighing on lower income consumers. Now, the impact of the Middle East conflict on energy and food prices could further erode purchasing power for this segment, and result in cutbacks in discretionary spending like travel and entertainment."

Sheth also said, "Higher income households had thus far been resilient, partly due to buoyant financial asset price growth. However, should financial market wobbles affect sentiment, even if high income household spending continues to grow, its pace could slow."

Mark Hamrick, senior economic analyst at Bankrate, said in early March that the oil shock could lead lower- and middle-income households to allocate more of their spending to gasoline. AAA data showed the national average price of gasoline on Monday was about $4 per gallon, up from about $3 a gallon a month earlier. The job market has seen limited broad-based job gains, a trend that could disproportionately affect lower-income Americans.