Franklin Templeton's Desai Rejects Top 10% Spending Thesis, Sees More Resilient U.S. Economy
Updated
Updated · The Globe and Mail · Jun 1
Franklin Templeton's Desai Rejects Top 10% Spending Thesis, Sees More Resilient U.S. Economy
1 articles · Updated · The Globe and Mail · Jun 1
Summary
Sonal Desai argued the U.S. recovery is not truly K-shaped, saying fears that affluent households alone are propping up growth overstate both spending divergence and the economy’s fragility.
BLS data put the top 10% of households at 23% of consumer spending in 2024—roughly stable since 2004—far below Moody’s estimate that they account for nearly half.
Bank of America card data and New York Fed indicators do show some divergence since 2023 to mid-2025, but Desai said the pattern looks more like parallel upward trends than a sharp split.
Dallas Fed work using a similar methodology found only a few percentage points of divergence since the 1990s, implying the economy is only slightly more exposed to weaker financial-asset returns.
Desai said rising incomes across the distribution—not just at the top—make the U.S. economy more durable, citing data showing poor and lower-middle-class households fell to 34.5% in 2024 from 53.8% in 1979.