The 'boomcession': Why Americans feel left behind by a growing economy

• Inflation affects lower-income Americans disproportionately, with grocery and shelter costs rising most between 2020-2025 and comprising a larger share of lower earners' budgets
• The labor market shows signs of a 'hiring recession' with December job openings at their lowest level despite stock market rallies, with layoffs surging 200% from December to January
• Economic gains are concentrated among the wealthy: the top 20% of Americans now drive total consumer spending more than ever, while 41% of those with credit scores below 670 report unstable finances

Market Summary: The "Boomcession" Phenomenon

Key Concept

The U.S. economy is experiencing a "boomcession"—a disconnect between strong economic indicators and widespread consumer financial distress. While GDP growth and stock markets surge, most Americans report negative sentiment about their financial situations.

Critical Data Points

• Credit card debt: Hit record high of $1.28 trillion (Q4, last year)
• Consumer perception: Nearly 60% of Americans believe the economy is in recession, up 11% from earlier in 2025
• Financial instability: 41% of those with credit scores below 670 and 54% of households earning ≤$50,000 report unstable finances
• Q3 2025 GDP: Expanded faster than expected, though driven primarily by top 20% of earners
• December job openings: Fell to lowest level despite stock market rallies

Inflation Disparity

Essential categories hit hardest: groceries and shelter (2020-2025). Lower-income households face higher inflation rates, particularly when overall price growth exceeds the Federal Reserve's 2% target. Food prices rose faster in poorer areas between Q2 2006 and Q3 2020.

Labor Market Concerns

Economists describe current conditions as a "hiring recession" or "coolish" environment. Major companies including Meta, Amazon, and Microsoft announced large-scale layoffs. January layoffs surged from December, though January payroll data exceeded expectations, driven primarily by healthcare sector growth (over 50% of net gains).

Market Implications

Stock market gains disproportionately benefit wealthy asset holders, while labor market tightening and AI-driven productivity increases threaten employment. Consumer spending remains strong but increasingly concentrated among top earners, creating a bifurcated economic reality that challenges traditional economic indicators' reliability.