September 2024
Gen X: The economy’s struggling middle child?
As retirement savings increase, discretionary spending has decreased, and caring for relatives is an additional burden for some.
Key takeaways
- Bank of America internal card data shows that Gen X discretionary spending has been particularly weak compared to that of other generations, down 2% year over year in August 2024. This is important given the latest U.S. Bureau of Economic Analysis data suggests that Gen X contributed the largest share of consumer spending through 2022.
- Why the slowdown? We find that rising outlays on necessities could be part of the explanation. But in our view, a key reason for this is that Gen X is saving more as they age. We find Gen X's investments per household are 40% higher than the overall population.
- Additionally, some Gen X households may be experiencing financial pressures from caring for their adult children, aging parents, or even both. While the "great wealth transfer" could be a much needed boost in the future, the current financial pressures may continue to dampen discretionary spending for now.
Read our full analysis for a more in-depth look at these trends.
