If you simply read the headlines, you’d think that the economy — or at least spending by the average consumer — is on the comeback:
Thanksgiving Day saw an 18% increase in online spending to $479 million.
U.S. consumers have spent $12.7 billion already in the first 25 days of the November to December 2011 holiday season, up 15% from the corresponding days last year.
Sounds good, until you remember that the income gap is real and the average consumer doesn’t matter so much in the broader context:
When discussing “the consumer,” it is important to remember that in reality, “the consumer” is the top 20% of income earners and then everybody else. The top 20% of income earners (who own about 80-90% of the equity market) account for about 40-45% of all spending in the economy.