It used to be that the richest people's buying habits were what kept the economy going – creating jobs and all that. But in the last two years, it's been lower-income people spending more... and saving less.
What it means: Reuters looked into the American economy to draw some conclusions on whether things are looking stable, and sustainable.
On the whole, they found, consumer spending is going up – but for the first time in two years, it's the bottom 60%, not the top 40%, who are fuelling the rise.
Unemployment is at its lowest since 2000, so more people are on wages than before. But while hourly wages for lower and middle income workers grew just 2% this year, spending rose by 8%... which means most of the 'growth' (the increase in goods and services produced in the country) is coming from people spending more than they're earning, and wiping out their savings – to the point where one in four Americans say they could not cover a $400 emergency expense.
