**The Upper Middle Class Is Getting Squeezed**
**The first two years of the pandemic were good for the group’s savings and investments, but 2022 isn’t**
**by Dion Rabouin, The Wall Street Journal, 7/25/2022**
**Upper-middle-class households are defined here as those earning between $75,301 and $127,300 a year, according to the Fed. They make more money than at least 60% of other households, but less money than the top 20% of earners....**
**Over the first three months of 2022, upper-middle-class families lost a bigger chunk of their stock portfolios than the people who make more than them, according to the Federal Reserve. Since the pandemic started, they saved less than most of the people who make less than them, according to Moody’s Analytics. The value of their liabilities grew by 2% in this year’s first quarter, more than any other group, as they took on greater debt for auto loans, credit cards and other consumer credit.....**
**Despite their relatively large salaries, upper-middle-income Americans have less in excess savings than all but the poorest U.S. households, both in aggregate and per household, according to Moody’s Analytics. (The poorest households are defined as those earning $28,400 or less a year.)...** [end quote]
The upper-middle class was excluded by income from many of the Covid benefits that went to lower-income groups. They tend to live in suburban homes with inflating insurance and long commutes where rising gas prices are a burden.
Consumer sentiment in the upper middle class and upper class has dropped over the past year until it’s not much higher than the lower income groups. The boost from the roaring 2021 stock market has vanished in 2022’s bear market.
The upper middle class has a Macro impact because they spend a lot of their income and they have more to spend than the lower income groups. A spending pullback of the upper middle class (a negative wealth effect from the bear market) could significantly slow the Macro economy.