Affluent Consumers Count for a Growing Share of American Consumer Market
The relative economic situation of the nation's nearly 10 million "highly" or "super" affluent consumers (defined as those with an household income of $150,000-$249,999 or of $250,000 or more, respectively) rebounded significantly in 2011 from its low point in the first half of 2009, according to "The Affluent Market in the U.S., 6th Edition," a recently released report from Packaged Facts.
In the first half of 2009, Experian Simmons national consumer survey data tabulated by Packaged Facts show that more than half of highly or super affluent consumers considered themselves worse off than they were 12 months previously, while only 16% considered themselves to be better off. These proportions shifted dramatically by the first half of 2011, when just under a quarter felt worse off while a third considered themselves better off than they were a year before.
According to David Sprinkle, publisher of Packaged Facts, these highly or super affluent consumers were therefore more likely in 2011 than they were in 2009 to have recently purchased goods such as home electronics (61% vs. 57%), household furnishings (45% vs. 41%), sporting goods (45% vs. 39%), and automobiles (35% vs. 31%).
Through thick and (relatively) a bit thinner, affluent household spending continues to account for a growing share of the American consumer economy. A Congressional Budget Office report released in October 2011 highlights that disproportionate growth in the economic power of the wealthiest segment of the American population is a long-term trend. For the top 1% of the population by income, average real after-tax household income grew by 275% between 1979 and 2007, for a compound annual growth rate of about 4.8% annually. In contrast, the average real after-tax income in the lowest income brackets grew by 18%, or about 0.6% annually.
Consumer Expenditure Survey data from the Bureau of Labor Statistics (BLS) confirm that a number of industries depend heavily on spending by the affluent. These include the automotive industry, where affluent consumers overall (those with a household income of at least $100,000) are responsible for 42% of all expenditures on new vehicles.
Affluent households overall more make up 20% of American households but control 51% of the nation's household income, and the concentration of income increases dramatically with higher income levels. Super-affluent households with an income of $250,000 or more make up 2% of all households but draw 12% of aggregate household income.
Households headed by Baby Boomers are by far the most significant generational segment of the affluent market. The $2.2 trillion generated annually by 12.5 million boomer households represents more than half of the aggregate income of affluent households overall.
Not surprisingly, moreover, affluent consumers are heavily concentrated in large metropolitan areas. The metro areas of New York, Los Angeles, Washington, D.C. and Chicago have 4.9 million households with an income of $100,000 or more, and account for 21% of all affluent households overall in the United States. The New York metro area alone contains 2.1 million affluent households, for an aggregate income of $384 billion. The aggregate income of highly and super-affluent households (those with an income of $150,000 or more) in the New York metro area, at $260 billion, is greater than that of entire states as economically significant as Virginia, Michigan, or Georgia.[Source: "The Affluent Market in the U.S., 6th Edition." Packaged Facts. 13 Dec. 2011. Web. 12 Jan. 2012.]