Read our full analysis for a more in-depth look at these trends.
Measuring the middle
Middle-income households’ spending and wage growth is improving, but an easing job market could potentially stall growth
April 2025
Key takeaways
- What defines today's middle-income American? Across the U.S., a middle-income household appears to earn around $80,000, but this differs by circumstances, including homeownership and family status. Interestingly, we find middle-income households skew slightly younger than the overall population, with Gen Z and Millennial's comprising a larger share of middle-income households than older ones.
- Middle-income households have been ramping up their spending growth since mid-2024, according to Bank of America aggregated credit and debit card data. In our view, this likely reflects a strengthening in their after-tax wage growth.
- But for younger middle-income households it appears this increase in spending growth is largely being driven by the rising costs of living, such as housing. Older generations, on the other hand, have seen significantly stronger growth in discretionary services spending in February, like dining out and travel.
- What's next? There are some early signs that the middle-income labor market could be softening more than the overall position. If this were so, the relative and recent strength in middle-income spending might start to fade.
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