The U.S. economy remains on a solid footing, with high-frequency economic indicators suggesting real GDP growth is running at roughly 3%, according to Wolfe Research. The firm said ongoing investment in artificial intelligence infrastructure, combined with favorable wealth effects and tax-related stimulus, continues to underpin economic activity.
Data from the May ISM Manufacturing survey released on Monday showed the sector expanding for a fifth straight month. Wolfe noted that the New Orders component, which forms part of its six-month moving average U.S. Market Cycle Framework, continues to point toward an Early Acceleration phase.
According to the firm, rising asset values are playing an important role in supporting consumer spending. With financial markets trading at record highs, spending activity remains particularly strong among higher-income households.
Wolfe estimates that the top 40% of U.S. income earners hold approximately 94% of the nation’s equity wealth, making them the primary beneficiaries of recent market gains.
The research house also highlighted the substantial increase in housing wealth since the pandemic. It estimates that U.S. homeowners have accumulated roughly $16 trillion in additional housing wealth since COVID-19, providing another source of spending power for affluent consumers.
The firm noted that around 75% of total housing wealth is owned by the top 40% of earners, reinforcing the role of wealth concentration in sustaining consumption and broader economic growth.