The top 10% of consumers by income are the primary driver of discretionary spending in the US economy, according to a Daily Insight published July 6, 2026, by the Bank of America Institute Bank of America Institute. The finding draws on Bank of America's internal transaction and account data, which the Institute uses to track consumer behavior in near real time Bank of America Institute.

For anyone pricing consumer-discretionary risk, this is not a trivial data point. It reframes the read on aggregate retail sales and card-spending prints: if the upper decile is doing the heavy lifting on non-essential outlays, then headline strength can mask a much narrower base of support than a simple average would suggest. A consumption base that is top-heavy behaves differently under stress than one that's broadly distributed — it's more sensitive to wealth effects from equity and housing valuations, and less sensitive to the labor-market conditions that matter most for median-income households.

Bank of America has built the Institute specifically to extract this kind of granularity. With tens of millions of deposit and card accounts on its books, the bank has a data set that updates faster than Census Bureau retail sales or BEA personal consumption expenditure figures, both of which arrive with a lag and get revised. The Institute markets its output as essential reading for government, business, and investment leaders Bank of America Institute, and the pitch has some substance: proprietary payments data has become a genuine input for macro forecasters trying to get ahead of official releases, not just a marketing exercise for the bank's research arm.

The mechanics behind a top-decile-driven spending pattern are familiar to anyone who has watched consumption data since the pandemic reopening. Lower- and middle-income households have absorbed several years of cumulative price-level increases against wage gains that, in real terms, have been uneven. Excess savings built up during 2020-2021 have been drawn down for that cohort. Higher earners, by contrast, have benefited disproportionately from equity market appreciation and, for homeowners, from locked-in mortgage rates that insulate them from the higher-rate environment renters and new buyers face. That combination tends to concentrate discretionary firepower — travel, dining, entertainment, big-ticket goods — among those least affected by rate and inflation dynamics.

The obvious read-through is to consumer-facing equities and the credit that funds them. Companies whose revenue skews toward discretionary categories — leisure, apparel, premium retail — carry different demand elasticity than those selling into a broad, low-income base. If a bank's own transaction data confirms concentration at the top, that's a data point worth weighing against management commentary on "resilient" consumer demand, which often blends both cohorts without distinguishing them.

There's also a policy dimension worth noting, though the Daily Insight itself is descriptive rather than prescriptive. A spending base concentrated among high earners is more exposed to shifts in capital-gains realization, asset prices, and tax policy than to payroll growth or unemployment claims. That matters for anyone modeling how monetary policy transmits to consumption: rate cuts that lift equity valuations could do more for discretionary spend than rate cuts that ease borrowing costs for median households, given where the spending power currently sits.

None of this is presented by the Institute as a forecast, and it shouldn't be treated as one here either. It is a snapshot from internal Bank of America data as of the July 6 publication date, and the composition of discretionary spend can shift with the next earnings season, the next round of asset-price moves, or a change in labor-market conditions for lower-income cohorts. The Daily Insight format is built for exactly this kind of frequent, incremental read rather than a definitive structural claim, and market participants should treat it accordingly — as one more data point in a mosaic that includes Census retail sales, card-spend trackers from other banks, and BEA's PCE releases, rather than a substitute for any of them.