The S&P 500 has analysts talking, but this measure only accurately measures wealth for the richest Americans. We're watching something else.
The People's Economy Index — which tracks the lived financial reality of the bottom 90% of American households — scores the first quarter of 2026 at 2.6 out of 10. We call that Structural Stress. Not crisis, but nowhere close to healthy.
The numbers behind the score tell the story plainly. The bottom 50% of Americans hold just 2.5% of national wealth, while the top 1% now holds more than the entire bottom 90% combined — the widest gap since records began in 1989. Credit card balances have hit a record $1.28 trillion at an average interest rate near 20%. The median American emergency fund is $600. And the lowest-earning workers saw their real wages actually fall in 2025 — the first decline outside a recession in over a decade.
Perhaps the most telling signal: 54% of Americans are cutting back on travel, dining, and entertainment in 2026. People don't stop spending on small pleasures because they feel cautious. They stop because the math stopped working.
The PEI is published quarterly. An optimal score — benchmarked to 1960s and 70s economic norms when prosperity was more broadly shared — would sit between 5 and 6. We are less than halfway there.
PEOPLE'S ECONOMY INDEX
S&P 90% · 2026 Q1 Report
An economic index tracking the lived reality of the bottom 90% of American households
2.6 out of 10 | OVERALL STATUS Structural Stress The economy is growing in aggregate but deeply stratified at the household level. The bottom 90% face record debt, depleted savings, falling real wages at lower income tiers, and near-total exclusion from the asset economy.
Scoring scale: 0 = Crisis · 5–6 = Optimal (1960s–70s norms) · 10 = Theoretical maximum |
Key Statistics at a Glance
Bottom 50% wealth share 2.5% Of all U.S. wealth | Credit card balances $1.28T All-time record | Median emergency fund $600 One repair from zero |
10th pct real wage growth −0.3% Fell in 2025 (EPI) | Real wages since 2021 −0.7% Never recovered from 2021–23 | CPI rise since Jan 2021 +22.7% vs wages +21.8% |
Avg credit card APR ~20% At record balances | Households cutting spend 54% Travel, dining, entertainment | Debt delinquency rate 4.8% Highest since 2017 |
Indicator Breakdown
Each indicator is scored out of 10. The optimal range is 5–6, calibrated to 1960s–70s wealth distribution norms when prosperity was more broadly shared. All scores reflect the ground-level reality of the bottom 90% of households, not national aggregates.
INDICATOR · SCORE · CHANGE FROM INITIAL ESTIMATE
Wealth Distribution Bottom 50% holds 2.5% of all U.S. wealth. Top 1% holds more than the entire bottom 90% combined — record concentration since 1989 tracking began. | 1.5/10 | ▼ 0.5 from initial |
Credit Card Debt Stress $1.28T total balance at ~20% APR. The average indebted cardholder owes $7,886 — costing ~$130/month in interest alone, a second utility bill that builds nothing. | 2.0/10 | ▼ 0.5 from initial |
Real Wage Growth vs CPI Headline real wage growth of +1.8% masks the bottom 10% whose real wages fell 0.3% in 2025. Cumulatively since 2021, real wages are still down 0.7% — the inflation shock was never recovered. | 2.0/10 | NEW indicator |
Savings Health National savings rate is 4.5% but the median emergency buffer is $600. That is not a cushion — it is a number that disappears with one unexpected expense. | 2.5/10 | ▼ 0.5 from initial |
Discretionary Spending 54% of Americans are cutting travel, dining, and entertainment in 2026. This pullback is broad, accelerating, and showing in real-time retail and restaurant data. | 3.5/10 | ▼ 0.5 from initial |
Housing Stability Debt delinquency at 4.8%, highest since 2017. Homeownership increasingly out of reach for first-time buyers. Rent burden remains at historic extremes. | 3.0/10 | ▼ 0.5 from initial |
Nominal Wage Growth (Bottom 80%) Low-income nominal wage growth: 1.1% vs high-income: 3.0%. Gap is widening in dollar terms and accelerating. | 3.5/10 | ▼ 0.5 from initial |
Deep Dive: Real Wages vs CPI
The headline wage number is one of the most misleading statistics in mainstream economic reporting. Here is what the data actually shows.
Metric | Value | Context |
Aggregate real wage growth (Feb 2026) | +1.8% | Misleading — driven by high earners |
10th percentile real wage growth (2025) | −0.3% | First decline outside recession in a decade |
CPI rise since Jan 2021 | +22.7% | Embedded permanently in household costs |
Avg nominal wage rise since Jan 2021 | +21.8% | Never fully closed the gap |
Cumulative real wage change since 2021 | −0.7% | The inflation shock was never recovered |
Bottom 10% real hourly gain since 2020 | +$1.34/hr | ~$2,700/year in real purchasing power |
Top 10% real hourly gain since 2020 | +$3.09/hr | ~$6,400/year — 2.3x the bottom gain |
Ground Truth — What This Feels Like at the Household Level
Economic data tells you the number. Ground truth tells you what the number means for a real family making real decisions.
| THE AVERAGE HOUSEHOLD You have a job. You are paying your bills — barely. Your credit card balance is higher than it was last year, and the interest charges are eating a chunk of every paycheck. You have not taken a real vacation. You are not saving anything meaningful. A broken transmission or an ER visit would be a financial emergency. You are not in crisis, but you have no margin. |
| THE BOTTOM 50% You own almost nothing — 2.5 cents of every dollar of national wealth belongs to the entire bottom half of the country. You rent. You have no meaningful investments. Wage growth is outpaced by what things cost. The economy is technically growing, but that growth is happening entirely above your head, in asset prices and equity portfolios you do not own. |
| THE REAL WAGE ILLUSION When economists say wages are beating inflation, they mean the average. For the bottom 10% of earners, real wages actually went backwards in 2025. And for everyone below the median, the math since 2021 still does not add up — prices rose 22.7%, wages rose 21.8%. That 0.9% gap, compounded over five years across every grocery run, utility bill, and tank of gas, is the persistent low-grade squeeze that people feel but the headline number erases. |
| WHY SPENDING IS PULLING BACK People do not cut discretionary spending because they feel cautious — they cut it because they have done the math and the math does not work. Restaurants, travel, and entertainment are the first things to go. When 54% of the country is pulling back simultaneously, that is not individual frugality. That is a structural demand problem hiding inside headline GDP numbers. |
| THE CUMULATIVE HOLE NOBODY TALKS ABOUT From April 2021 to April 2023, inflation outpaced wages for 25 consecutive months. That is two full years of purchasing power erosion. Since then, wages have nominally caught up — but the prices from those years are still embedded in everyday life. Rent did not come back down. Groceries did not come back down. The monthly budget that broke in 2022 was never actually repaired. Slower inflation just means the hole stopped getting deeper. |
| WHAT A SCORE OF 5–6 WOULD LOOK LIKE Bottom 90% holding 35–40% of national wealth. Credit card balances at pre-2020 levels with APRs under 15%. Median emergency savings above $3,000. Low-income wage growth matching or exceeding inflation. A household that could absorb an unexpected expense without going into debt. That was closer to reality in the 1960s and 70s. It is not the reality today. |
Methodology & Scoring Weights
The PEI is a weighted composite of seven indicators calibrated to reflect the economic reality of the bottom 90% of U.S. households, not national aggregates. The optimal range of 5–6 is benchmarked to 1960s–70s wealth distribution norms, when prosperity was more broadly shared across income tiers.
Indicator | Weight | Score | Primary Source |
Wealth distribution | 22% | 1.5/10 | Federal Reserve DFA |
Credit card debt stress | 20% | 2.0/10 | NY Fed / LendingTree |
Real wage growth vs CPI | 18% | 2.0/10 | EPI / BLS / Cleveland Fed |
Savings health | 15% | 2.5/10 | BEA / Bankrate |
Discretionary spending | 12% | 3.5/10 | Bankrate / BofA |
Nominal wage growth | 8% | 3.5/10 | Bank of America |
Housing stability | 5% | 3.0/10 | NY Fed / Census |
WEIGHTED COMPOSITE SCORE | 100% | 2.6/10 | Structural Stress |
About This Index
The People's Economy Index (PEI) was created to fill a gap in mainstream economic reporting: the absence of a single, accessible metric that captures the economic wellbeing of ordinary American households rather than aggregate national performance.
Conventional indicators like GDP, the unemployment rate, and the S&P 500 are real and meaningful — but they can look healthy while the bottom 90% of households are under significant financial stress. The PEI is designed to make that divergence visible.
The index will be published monthly. Future editions will track month-over-month movement, add regional breakdowns, and segment further by age cohort. Suggestions for additional indicators are welcome.
Data sources used in this report
- Federal Reserve Distributional Financial Accounts (Q3 2025)
- New York Fed Household Debt and Credit Report (Q4 2025)
- Economic Policy Institute wage analysis (2025)
- Bureau of Labor Statistics / USAFacts real wage data (Feb 2026)
- Cleveland Fed real hourly wage report (Feb 2026)
- Bureau of Economic Analysis personal savings rate (Jan 2026)
- LendingTree credit card statistics (2026)
- Bankrate discretionary spending survey (2025)
- Bank of America wage divergence data (Dec 2025)
People's Economy Index™ · S&P 90%™ · 2026 Q1 Report · All data sourced from public federal datasets and peer-reviewed survey research.
