Baby boomers drive U.S. consumer spending via $90 trillion wealth

The resilience of U.S. consumer spending despite inflation and high interest rates is increasingly attributed to the massive wealth held by the baby boomer generation. Often described as a ‘G-shaped economy,’ this trend suggests that consumption is being driven by accumulated retirement wealth rather than labor income.

Baby boomers hold nearly $90 trillion in net worth, representing approximately 52% of all U.S. household wealth. This demographic controls about 54% of household stocks and mutual funds and 41% of household real estate. Unlike younger generations, boomers are often insulated from high borrowing costs; many own their homes outright or have locked in low mortgage rates. Furthermore, higher interest rates benefit this group as they hold roughly 60% of all household money market funds, generating significant interest income.

In contrast, younger generations like Millennials and Gen Z face greater financial hurdles, including high housing prices and a greater dependence on wages. While the Silent Generation is expected to pass on roughly $20 trillion to their boomer heirs, the eventual transfer of wealth to younger generations may be mitigated by taxes, debt, and retirement expenses.