On the other hand, the vast majority of Americans in the Main Street economy, i.e., those who rely on real-world jobs with salaries, hourly wages, and other earnings from their labor, continue to fall further and further behind in both real income and household wealth. For Main Street, personal indebtedness is at record highs (more than $17 trillion in the United States), and savings rates are near all-time lows. Average real (after inflation) income has fallen since 2019. The financial stress on American households is increasing with each passing month.

A crisis is brewing.

The value and "dollar" retail stores serve as a good proxy for the financial health of the middle class and low-end household. The American consumer is increasingly closing his or her shrinking wallet to anything other than the most essential of items, such as food and fuel. Facing weak sales trends and profits pressured by everything from rising costs to forced discounting and increased theft, shares of Dollar General and Dollar Tree have each fallen approximately one-third since the beginning of August. Target had negative comparable store sales for over a year before finally turning slightly positive this quarter. The big box retailers, such as Home Depot, Lowe's, and Best Buy, that sell more expensive, discretionary items, have had negative comparable store sales for six to ten consecutive quarters. Popular restaurants and specialty retailers alike are seeing fewer consumers place smaller-value orders.

Compare this dismal performance to the fortunes of the luxury goods sector, which caters to the wealthiest of affluent customers around the world. LVMH, which owns well-known global luxury brands such as Louis Vuitton, Moët, and Tiffany's, reported 2 percent organic revenue growth for the first half of 2024, along with operating profit margins "significantly exceeding pre-Covid levels," despite "a geopolitical and economic environment that remained uncertain." Ferrari, another proxy brand for high-end consumer spending, announced revenues were up 16.2 percent, with shipments up almost 3 percent, in the second quarter compared to last year. Going from strength to strength, Ferrari's shares are up more than 58 percent in the past year.

Comparing the "Dollar General versus Ferrari" economies reveals stark differences between the two worlds. Wall Street continues to prosper in the face of inflation, slowing GDP growth, and corporate layoffs, while Main Street is clearly in a practical, if not technical, recession, as good-paying jobs grow scarce. For most Americans, things are getting worse, and they know it.