Bank of America Report Finds Wealthy Most Pessimistic While GDP Rises 4.9%

The United States gross domestic product grew by a staggering 4.9% in third quarter, well ahead of Wall Street estimates. Consumer spending, government spending and residential investments were the catalysts for growth.

While market experts still do not believe the central bank will hike rates next week, the report left little optimism for a rate cut in the months ahead. Every major United States stock market declined for the week even before the report, which did little to move markets in either direction. Investors are clearly concerned with the present direction of the economy.

Meanwhile, Bank of America reported that the consumers that are most pessimistic based on the bank’s Consumer Checkpoint Survey are actually high income households due to soft wage growth.

The present economic anxiety in the United States is unique in that the pressure on consumers is actually being felt at the top of the income scale as high paid white collar jobs may be under greater threat than lower wage earners due to AI and other factors. For banks, this may put pressure on small business clients as well as higher end real estate lending business.

Consumer spending rose by 4% after only a .8% growth in the second quarter and marked the largest increase in two years. The market barely reacted, as many analysts find the fourth quarter to be a more telling indicator for the direction of consumer sentiment.

The recession predicted by many economists has yet to happen, at least for the middle class, but most analysts still predict slower growth ahead. Prices continued to increase at a much higher clip than the central bank’s goal of 2% even as inflation has showed signs of being kept in check due to higher interest rates.