Upper-income Americans plan more spending amid market highs, but housing and jobs worries cloud mood of other consumers--Bain/Dynata Consumer Health Indexes

Optimism among better-off earners set to buoy near-term consumer spending, but longer-term outlook dogged by financial anxieties among medium- and lower-income households

BOSTON, July 17, 2025 /PRNewswire/ -- Upper-income Americans plan increased spending as equity market highs fuel a burst of optimism, with the outlook for these consumers rebounding to levels not seen since before April's tariff announcements. But US consumer prospects continue to diverge between income groups, with the outlook for medium-income and lower-income earners are increasingly clouded by weakening housing and job markets, respectively, according to the latest results of the Bain & Company/Dynata Consumer Health Indexes (CHI).

The Bain/Dynata analysis in July's CHI report concludes that the upbeat mood of upper-income Americans will keep overall US consumer spending resilient in the near term. But the report also cautions that, with the present exuberance of the upper-income group contingent on markets' current strength, this is unlikely to be inherently durable and overall consumer demand prospects could prove vulnerable in the medium term and beyond should the mood of medium- and lower-income households further sour.

In today's data, the Bain/Dynata indexes' forward-looking score for the outlook among upper-income earners (earning more than $100,000 per year) leapt by 6 points in the past four-week period, on the heels of a 10.5-point surge in June, which marked the largest one-month rise on record.

The resurgence in the CHI gauge of consumer prospects for upper-income Americans took this back to highs well above its average over the past 12 months, more than erasing steep falls in the wake of April's tariffs. The rosy immediate outlook for this better-off group comes amid the rally in US equity values to record highs, enhancing the value of their investment portfolios – the most important asset for these earners. The rebound in the outlook for the upper-income group also fueled a 2.4-point jump in the CHI report's composite outlook score for all consumers, to a headline reading of 101.0.

Reflecting the heightened optimism of upper-income households, the CHI gauge of their intent to spend also rose sharply, climbing by 2.4 points in July, and by 6.2 points over the past two months. With a reading of 112.4, spending intentions for the upper-income group are now in very positive territory and at levels not seen since November 2023, when spending for these earners was easing back from post-pandemic highs, the report notes.

"Upper-income Americans are now completely out of the period of tariff doldrums and are expecting great things from their investment assets. They are growing more enthusiastic about spending more, with our readings at levels not seen since two years ago, when this group's spending was riding high on the pent-up demand of the post-Covid period," Brian Stobie, vice president in the Macro Trends Group at Bain & Company, commented.

Prospects for US consumers continued to diverge between income groups in July, however, with middle- and lower-income American consumers reporting cloudier skies – reinforcing the trend detected by the Bain/Dynata CHI report for June.

The CHI outlook score for prospects among middle-income earners (earning $50,000 to $100,000 per year) has stalled in the five months since March and is hovering just above a neutral reading of 100. In July, the CHI gauge of middle-income Americans' intent to spend dropped further into negative territory, declining by 1 point, to a reading of 97.4, to stand 3 points lower in two months. The dampening seen in middle-income households' spending plans likely reflects a gloomier view among the group of prospects for the group's main asset, their homes, amid a stalling of many housing markets across the US, the report concludes.

Consumer prospects among lower-income Americans (earning below $50,000 per year) have also deteriorated, with the CHI outlook score for the group unchanged in July, at 96.6, and stuck in negative territory for the second month in a row following a plunge in this reading in June. The increased pessimism among lower-income earners provides likely confirmation that negative developments in the labor market are worsening the group's view of job prospects.

Brian Stobie said: "July's CHI numbers indicate that upper-income Americans are increasingly upbeat amid the equity market rally. But middle-income households are curbing their spending plans as some housing markets stall while lower-income earners continue to fret over near-term job prospects. Since the upper-income group represents an outsized share of US spending – and particularly discretionary spending – we don't expect any large, near-term pullback in overall consumer spending. However, we do caution that the present upper-income exuberance is not inherently durable. In the short- to medium-term, this is dependent on the markets sustaining present highs. And in the medium- to long-term, it's dependent on lower- and middle-income earners' mood not souring to such an extent that they drag down companies' earnings and hence market valuations."

For more details and the full report (PDF), please click here or get in touch via the media contacts below.

Media contacts
For any questions or to arrange an interview, please contact:
Gary Duncan (London) – Email: gary.duncan@bain.com 

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About Dynata

Dynata is the world's largest first-party data company for insights, activation, and measurement. With a reach that encompasses 70 million consumers and business professionals globally and an extensive library of individual profile attributes collected through surveys, Dynata is the cornerstone for precise, trustworthy quality data. The company has built innovative data services and solutions around its robust first-party data offering to bring the voice of the customer to the entire marketing continuum — from uncovering insights to activating campaigns and measuring cross-channel marketing return on investment. Dynata serves more than 6,000 market research, media and advertising agencies, publishers, consulting and investment firms, and corporate customers in North America, South America, Europe, and Asia-Pacific. Learn more at www.dynata.com

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