The wealth divide is exacerbated by two different types of inflation. While wages are benchmarked against CPI (consumer goods), wealth for asset-holders grows with "asset price inflation" (stocks, real estate), which compounds much faster. Young people paid in cash cannot keep up.

While high-income spending remains stable, the next wave of consumption growth will stem from a recovery in the middle-income segment. This rebound will be driven by stabilizing factors like reduced policy uncertainty and neutral monetary policy, not a major labor market acceleration.

Despite the best earnings season in four years for companies like Apple and Amazon, consumer brands like Chipotle, Shake Shack, and Crocs report slowing sales from 20-somethings. This demographic faces soaring unemployment and slowing wage growth, creating a hidden weak spot in an otherwise strong economy.

The combination of solid GDP growth and weaker job creation is not necessarily a warning sign, but a structural shift. With productivity growth rebounding to its 2% historical average and labor supply constrained by lower immigration, the economy can grow robustly without adding as many jobs as in the past.

Despite America's high standard of living, decades of wage stagnation have created a national psychology of pessimism. Conversely, China's explosive wage growth, even from a lower base, fosters optimism. This psychological dimension, driven by the *trajectory* of wealth, is a powerful and often overlooked political force.

China’s economic strategy prioritizes technology and manufacturing competitiveness, assuming this will create a virtuous cycle of profits, jobs, and consumption. The key risk is that automated, high-tech manufacturing may not generate enough jobs to significantly boost household income, causing consumer spending to lag behind industrial growth.

Despite strong export-led growth in Asia, the benefits did not trickle down to households. Weak household income and consumption prompted governments and central banks to implement fiscal support and monetary easing. This disconnect between headline GDP and domestic demand is a critical factor for understanding Asian economic policy.

Consumer spending patterns in the gaming sector act as a canary in the coal mine for the economy. When consumers feel financial pressure, the first cutback is on destination travel like Las Vegas. A more severe warning sign of a pervasive downturn would be a subsequent decline in spending at local, regional casinos.

Top retailers report stable holiday sales, but this masks a weaker overall market with a negative trend. These giants are not thriving due to a strong consumer, but by capturing significant market share from smaller competitors in a contracting environment.