Despite rising housing costs and everyday expenses, U.S. consumer spending has remained unexpectedly sturdy — but that strength masks a widening gap between generations. New data from the Federal Reserve, consumer surveys and bank research suggest older households are fueling much of the economic resilience, while younger Americans struggle with shrinking wealth and affordability pressures.
A generational fault line
Economists are increasingly describing the current landscape as a **G-shaped economy**, a term highlighting differences by age rather than by income alone. Rather than a simple rich-versus-poor split, the pattern looks more like two separate tracks: older Americans with larger accumulated assets and younger households facing rising costs and weaker balance sheets.
Ed Yardeni, president of Yardeni Research, argues the divide is rooted in life stage. Older adults tend to hold more home equity, retirement savings and investments, giving them more flexibility to spend. Younger cohorts, by contrast, often carry higher debt loads relative to assets and face steeper housing and living costs.
Numbers behind the split
Several recent pieces of evidence point to the gap:
- Federal Reserve report (Survey of Consumer Finances): Between 2022 and 2025, median net worth rose 37% for families headed by someone 75 or older, while families led by someone younger than 35 saw median net worth fall about 23%.
- Income trends: Median income for households with heads age 75+ increased roughly 24% over the same period, versus about 2% for families under 35.
- Consumer survey: A mid-April to mid-May poll of 1,000 U.S. adults (±3.1 percentage points) found baby boomers report higher satisfaction with their finances and greater confidence in financial decision-making than younger generations.
- Bank account flows (JPMorganChase Institute): In the three months ending April 2026, 8.2% of individuals moved money from investment accounts into checking — up from 4% in the same period in 2019 — and such transfers made up a larger share of household spending.
How older Americans are supporting spending
Data from the JPMorganChase Institute show investment withdrawals are increasingly part of everyday cash flow for older and higher-income households. For people 65 and older in the top income decile, net withdrawals from investment accounts rose from about 24.5% making such withdrawals in 2019 to 37.3% in 2025, with those transfers accounting for a larger slice of their spending.
That trend reflects several forces: the normal drawdown of retirement savings, the migration from traditional pensions to defined-contribution plans, and gains in investment values that boost household wealth.
Survey snapshots: how different generations feel
Findings from the consumer survey show marked differences in perceived financial security:
- About 41% of baby boomers reported being satisfied with their financial situation, compared with roughly 29% of Gen X and lower shares among millennials and Gen Z.
- More than half of boomers said they felt sufficiently knowledgeable to make financial decisions, versus about four in ten or fewer in younger groups.
Why this matters now
These generational shifts affect more than personal finances. Because older households hold a disproportionate share of wealth and are currently supporting higher spending, consumer demand patterns — from big-ticket purchases to everyday services — can be stronger than aggregate income figures suggest. At the same time, younger consumers’ weaker balance sheets could damp future growth and widen inequalities.
Policymakers and businesses monitoring the economy should note that headline spending strength may obscure fragile pockets of demand. If younger cohorts continue to struggle with housing affordability and limited wealth accumulation, long-term consumption trends and labor market dynamics could shift.
What to watch next
Key indicators to follow in coming months:
- Changes in median net worth and income by age group in successive Fed reports
- trends in withdrawals from investment accounts and how they feed into household spending
- housing affordability measures and debt-service ratios for younger households
Experts caution the generational story is not universal — not every boomer is well-off and not every younger person is financially strained — but the patterns emerging in official data and bank research are helping explain why consumer spending remains resilient even as many younger Americans say they are squeezed.
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Jordan Keller specializes in analyzing the US financial markets. With concrete recommendations, he helps you secure and boost your investments by providing strategies that adapt to market fluctuations.