Plutonomy Consumption

Plutonomy Series

Citigroup Plutonomy Report, 2005, Excerpts

Understanding how the plutonomy impacts consumption is key. There is no such animal as “the U.S. consumer” or “the UK consumer”, or indeed the “Russian consumer. There are rich consumers, and there are the rest. The rich are getting richer, and they dominate consumption. Their trend of getting richer looks unlikely to end anytime soon.

In plutonomies, the rich absorb a disproportionate chunk of the economy and have a massive impact on reported aggregate numbers like savings rates, current account deficits, consumption levels, etc. The top 1% of households in the U.S. accounted for about 20% of overall U.S. income in 2000. The top 1% of households also account for 33% of net worth, greater than the bottom 90% of households put together. The top 1% of households account for 40% of financial net worth, more than the bottom 95% of households put together.

Clearly, the analysis of the top 1% of U.S. households is paramount. The usual analysis of the “average” U.S. consumer is flawed from the start.

Luxury carmaker Bentley sees sales rise 37% in 2011

http://www.bbc.co.uk/news/business-16393679

03 Jan 2012

Luxury carmaker Bentley has reported a 37% rise in sales in 2011, saying demand has returned to pre-recession levels. The US continues to be Bentley's number one market with 2,021 cars sold in 2011, an increase of 32%. However, China took second spot with sales almost doubling to 1,839, surpassing the previous year's record. December's figures were the best since Bentley's record year of 2007 and the second best month in its history.