Wolfe Research believes the U.S. economy continues to perform strongly, with real-time economic measures indicating growth of around 3%. The firm attributes much of that resilience to rapid AI-related investment, supportive tax policies and the continued impact of rising household wealth.
The latest ISM Manufacturing report for May pointed to a fifth consecutive month of expansion. Wolfe highlighted that the survey’s New Orders index, a key input in its proprietary U.S. Market Cycle Framework, remains consistent with an Early Acceleration stage in the economic cycle.
The firm argued that the wealth effect remains a significant driver of consumer activity, particularly as equity markets continue to trade near record levels. Because stock ownership is concentrated among higher-income households, market gains are translating into stronger spending from affluent consumers.
According to Wolfe’s analysis, the highest-earning 40% of Americans control roughly 94% of total equity holdings, placing them in a position to benefit disproportionately from the ongoing rally in financial assets.
Housing wealth is also contributing to economic strength. Wolfe estimates that residential property values have generated approximately $16 trillion in additional household wealth since the pandemic, further supporting spending among wealthier segments of the population.
The firm noted that about three-quarters of U.S. housing wealth is concentrated within the top 40% of income earners, helping to sustain consumer demand and reinforce the economy’s current growth trajectory.
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