The Richcession Keeps Rolling

livemint.com:

The chances that the U.S. will plunge into a recession this year are slipping. But the richcession? It’s still rolling.

The economy keeps chugging along, adding jobs and growing despite still-high inflation and Federal Reserve rate increases. But for many richer Americans, it probably feels like a recession has already begun. The Commerce Department last Thursday revised higher its assessment of first-quarter gross domestic product—it now says GDP grew at a 2% annual rate, versus its previous estimate of 1.3%.

Economists meanwhile are busy moving up their estimates for second-quarter GDP growth. Yet while the better-off are, by definition, better off than the poor, they have been hit harder by layoffs, have been less able to secure wage increases that keep up with rising prices and have been more affected by the slump in profits that began to take hold last year. In other words, it is still looking like a richcession, where amid economic uncertainty, the rich feel more of the sting.

And this, in turn, is beginning to have knock-on effects, with richer Americans reining in their spending relative to others. Layoffs are still making headlines, and they are still disproportionately affecting higher-earning workers. By the count of outplacement company Challenger, Gray and Christmas, about one-third of layoffs announced by companies this year have come from tech firms such as Facebook parent Meta Platforms, where the median employee made $296,320 in 2022.

Job cuts elsewhere have been aimed at higher-paid workers, such as at Ford Motor, where planned layoffs are concentrated in the engineering ranks. Meanwhile, overall layoffs have remained low. Labor Department figures showing that even though the number of people in the