ATLANTA — The notion of an “average” U.S. consumer no longer reflects economic reality, as widening disparities in income and wealth reshape lending, spending and risk, according to a new report from Equifax.
In its latest e-book, “Why The ‘Average’ Consumer No Longer Exists,” Equifax said the U.S. economy has evolved into a “K-shaped” structure following the pandemic, with households diverging into two distinct financial trajectories.
According to Equifax, total U.S. wealth now exceeds $71 trillion but is unevenly distributed. The company reported that approximately 13.8 million affluent households earning more than $1 million annually hold about $53 trillion of that wealth, while roughly 71 million households earning less than $100,000 annually hold just $1.5 trillion.
Contraction of Middle Class
Equifax said this divergence has contributed to a contraction of the middle class and a shift in economic dynamics. Credit risk is becoming more concentrated among certain borrower segments, while overall spending growth is increasingly driven by financially stronger households. At the same time, economic resilience is less evenly distributed across income groups.
The company warned that reliance on averages to guide policy and business decisions may lead to flawed conclusions, as those measures mask significant variation across consumer segments. Instead, Equifax said lenders, businesses and policymakers should focus on distribution-based analysis to better understand consumer behavior and risk.
Additional Findings
The report also highlighted generational differences, noting that Generation Z consumers have surpassed Millennials in Equifax’s Market Pulse Index, suggesting greater financial agility among younger borrowers.
Equifax said the findings underscore the need for more targeted strategies in lending and policymaking as traditional assumptions about the “average” consumer become increasingly outdated.
