During economic downturns those in the middle are most affected. They tend to be living at their means or above their means, yet spending only about 60% of their money on necessities. In recession, they stop spending the other 40%. So merchants selling to them get whacked with a 40% drop in sales.
But the richest 1% of our population controls more wealth than the bottom 90%. The richest 20% account for more than 60% of the consumption. Consumer spending is being done by those unaffected by rising gas and oil prices, inflation, the housing slump, and so on. It doesn’t matter to them. The big rise in utility bills had zero impact on affluent consumers’ contributions to the economy.
Despite inflation, sales of big yachts, custom-made shoes, designer wristwatches and silverware all increased. Those businesses are doing very nicely despite the economy.
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