Consumer spending has outpaced disposable income growth for two straight years, pushing the saving rate lower and prompting Ed and Elias to argue the economy is “G-shaped,” not “K-shaped.”
Retired Baby Boomers sit at the center of that view: they no longer draw paychecks, but their assets and extra leisure time are sustaining demand.
That generational explanation is meant to resolve what looks like a warning sign in the data, with current trends pointing to a negative household saving rate by 2030.
The broader implication is that headline spending strength may reflect age-driven wealth and retirement behavior more than a simple split between affluent households and everyone else.