WASHINGTON, Nov. 3 (Xinhua) -- Top earners -- not overall consumers -- are driving retail growth amid high inflation in the United States, experts said.
Affluent consumers are unperturbed by surging inflation and continue to spend on travel, restaurants and entertainment, while lower-income Americans are scaling back, according to data and experts.
While U.S. retail sales jumped in August, those numbers were driven by higher-income consumers and by higher gas prices that forced drivers to spend more per gallon.
"It's a fact that overall consumer spending is being fueled by the one-fifth or so who are best off," Clay Ramsay, a researcher at the Center for International and Security Studies at the University of Maryland, told Xinhua.
"At the same time, lower earners are also spending more in dollar terms by buying the same things at higher prices," Ramsay added.
Credit card companies underscore this trend.
American Express, a major U.S. credit card company, reported a surge in revenue to 20.1 billion U.S. dollars, up 9 percent year-on-year, in the third quarter. Moreover, card spending increased 8 percent to 454 billion dollars. Travel and entertainment spending grew 10 percent. Airline spending climbed 13 percent and restaurant purchases rose 9 percent, noted U.S. business magazine Forbes in an article published Oct. 26.
"American Express has a relatively affluent customer base," Forbes said.
Overall credit card use also differs among income earners, with lower earners increasingly using plastic to survive while affluent households use credit cards for travel and entertainment, according to data and experts.
At the same time, American Airlines reported third-quarter revenue of 16.3 billion dollars, up 19.3 percent from the same period a year ago.
"Demand for travel, restaurants and other discretionary activities remains resilient," Forbes said.
The stock market, which is near all-time highs, has given affluent Americans a financial cushion.
Meanwhile, Dollar General and Dollar Tree, both discount stores, beat quarterly sales expectations in August as lower-income individuals sought bargains on daily necessities. This underscores the trend of lower-income folks downgrading to less expensive options, experts said, and comes as wage growth has hit a wall, despite elevated inflation.
Dean Baker, a macroeconomist and co-founder of the Center for Economic and Policy Research, told Xinhua: "Real wages are falling. And with jobs barely growing, that means wages are not driving consumption."
While President Donald Trump campaigned on promises to tamp down inflation, prices remain high. And experts said the picture is complicated.
Ramsay noted that October's consumer confidence report from the Conference Board found that "sentiment improved very slightly, perhaps reflecting gas prices easing by 25 to 50 cents a gallon."
Experts said this is likely to affect the midterm elections. ■