In brief
In August, U.S. retail sales climbed, but the growth was largely powered by affluent households spending on travel, restaurants and entertainment. Credit‑card data from American Express and industry reports underscore this income‑based divide, while discount retailers recorded gains as lower‑income shoppers shifted to bargain hunting. Analysts question whether this wealth‑driven trend will sustain amid inflationary pressures and sluggish wage growth.
On November 4, 2026, Xinhua reported that U.S. retail sales in August jumped, but the headline growth was supplied largely by affluent consumers who continued to spend on travel, dining and entertainment despite high inflation levels.
The data show that while overall retail sales climbed, most of that lift came from the top one‑fifth of income earners—those with the financial means to weather price increases—rather than the broader consumer base.
Credit‑card data reveals a clear income wedge
American Express, a major U.S. credit‑card issuer, announced that its third‑quarter revenue reached US$20.1 billion, a 9 percent year‑on‑year increase, while total card spending rose 8 percent to US$454 billion. The company’s travel and entertainment lifts grew 10 percent, airline spending increased 13 percent, and restaurant purchases rose 9 percent.
"American Express has a relatively affluent customer base," Forbes noted in its October 26 article.
This pattern aligns with data and expert commentary that affluent households use credit cards for discretionary travel and dining, whereas lower‑income consumers increasingly rely on plastic to micromanage budgetary pressures.
Corporate snapshots underscore the trend
American Airlines reported a third‑quarter revenue of US$16.3 billion, up 19.3 percent from the same period a year earlier, reflecting robust demand for travel among high‑income travellers. In contrast, discount retailers Dollar General and Dollar Tree beat August sales expectations as lower‑income shoppers pivoted toward cost‑effective purchases of daily necessities.
"Demand for travel, restaurants and other discretionary activities remains resilient," one Forbes analyst said.
Macro‑economic backdrop
Clay Ramsay, a researcher at the Center for International and Security Studies at the University of Maryland, told Xinhua that overall consumer spending is powered by a small elite, the top one‑fifth of earners. He added, "At the same time, lower earners are also spending more in dollar terms by buying the same things at higher prices."
"It's a fact that overall consumer spending is being fueled by the one-fifth or so who are best off," Ramsay said.
Dean Baker, a macroeconomist and co‑founder of the Center for Economic and Policy Research, echoed the unevenness, pointing to wage growth stagnation hitting a wall while inflation remains high.
"Wage growth has hit a wall, despite elevated inflation," Baker told Xinhua.
Further context comes from a recent analysis of the U.S. wealth effect on consumer spending: between 2021 and 2025, inflation‑adjusted consumer spending increased by about 4 percent annually, whereas real disposable income grew only 1.6 percent per year. The study suggests that rising wealth—particularly among higher earners—has amplified overall spending even as broader economic fundamentals lag.
Open questions for policymakers and businesses
Analysts now ask whether this affluent‑driven retail momentum will endure as headline inflation rises and wage growth remains constrained. Will lower‑income households eventually catch up, or will rising prices continue to widen the spending gap? How sustainable is the current expansion in discretionary categories like travel and entertainment when inflation persists?
Policymakers are also evaluating whether targeted fiscal measures could help lower‑income consumers remain spendful without stoking inflation further. Meanwhile, retailers are debating how to balance inventory between premium discretionary goods favored by wealthy shoppers and cost‑effective staples in demand from budget‑conscious customers.
Ultimately, the August data confirm that higher‑income consumers are the dominant force driving recent U.S. retail growth, a pattern that continues to highlight the economic divide within the consumer market.
