Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTFiona CraigSat, June 6, 2026 at 3:51 PM GMT+2 2 min readgrowth money graph NEW SIZE ©ShutterstockWolfe Research believes investors may be overlooking one of the most important drivers of the U.S. economy: the wealth effect. While much of the market’s attention has focused on artificial intelligence investment, the firm argues that rising household wealth is playing an equally important role in sustaining economic activity.Chris Senyek, an analyst at Wolfe Research, told clients that the U.S. economy continues to show strong momentum, with real-time indicators suggesting growth of around 3%. According to the firm, that performance is being supported by several factors, including AI-related investment, the wealth effect and tax stimulus associated with the One Big Beautiful Bill.Manufacturing Data Signals Continued ExpansionRecent economic data appear to support Wolfe’s constructive outlook.The May ISM Manufacturing survey showed the sector expanding for a fifth consecutive month. Wolfe highlighted the New Orders component in particular, noting that it continues to point toward an Early Acceleration phase within the firm’s U.S. Market Cycle Framework.The data suggest that economic activity remains resilient despite ongoing uncertainty surrounding inflation, interest rates and global geopolitical developments.Wealth Effect May Be UnderestimatedSenyek argued that investors have not fully appreciated the extent to which rising asset values are supporting consumer spending.“Investors shouldn’t ignore the implications of the wealth effect on spending,” he said, pointing to record-high equity markets and continued strength among higher-income consumers.According to Wolfe Research, the top 40% of income earners in the United States control approximately 94% of all equity holdings, meaning that gains in financial markets disproportionately benefit the households with the greatest spending power.“The top 40% of earners in the U.S. own 94% of equities,” wrote Senyek.The firm believes this concentration of wealth helps explain why consumer spending has remained relatively strong despite broader economic concerns.Housing Wealth Provides Additional SupportBeyond the stock market, Wolfe also sees rising housing wealth as an important source of financial strength for consumers.The firm estimates that roughly $16 trillion in housing wealth has been created since the COVID-19 pandemic.Much of that wealth is concentrated among higher-income households, with the top 40% of earners owning approximately 75% of total housing wealth.According to Wolfe, this provides an additional financial buffer for consumers who are more likely to spend on discretionary products and services.Terms and Privacy PolicyPrivacy & Cookie SettingsMore Info