And upper-crust spending, while welcome, can be worrisomely volatile:Since it involves luxuries, not everyday necessities, the buying can suddenly shrink if something such as the recent stock market plunge panics affluent shoppers.
What's more, some analysts calculate that another big chunk of the recent spending spurt has come from an even shakier source — delinquent homeowners who have more cash in their pockets because they've stopped making mortgage payments now that their houses are worth less than the loan amounts.
Economists' uneasiness over building a recovery on such uncertain foundations is all the greater because the larger fundamentals also are shadowed by uncertainty.
The improving job market should broaden the base of consumer spending, but wages are not expected to go up fast, which will crimp middle-class spending power.
Moreover, the job gains this year have gone largely to less-educated and lower-income workers, according to Labor Department statistics.
"The economy can grow if lower-income households aren't able to spend, but it can't flourish," said Mark Zandi, chief economist at Moody's Economy.com.
The recent acceleration of spending "was a little bit of release of pent-up demand," said Ken Goldstein, an economist at the Conference Board, a New York research group that tracks consumer activity.
"We survived the recession, we deserve a night out," Goldstein said of the mood of many spenders. Without much more job growth and bigger incomes, he said, "that window will close fast."
At mercy of marketsThe surge in spending by upper-income Americans could be seen in the upturned sales of high-end cars, clothing and luxury services. Nieman Marcus, Mercedes and Morton's restaurant, among other companies catering to the affluent, have prospered accordingly.
(2 of 2)Real Estate Outlook: Positive TrackConsumer confidence nearly doubles locally
