Ed Yardeni is calling the U.S. a G-shaped economy, arguing that baby boomers’ wealth and spending power are doing more to hold up consumer demand than wages alone. In an early-month note, he said older Americans now sit on nearly $90 trillion in net worth and that their buying has helped keep spending resilient even as borrowing costs stay high.
The timing matters because consumer spending makes up roughly 70% of GDP, so a shift in who has the money to spend can move the whole economy. Yardeni’s point is not that younger households do not spend, but that the biggest share of the momentum now comes from people who own more assets, have more savings and are less exposed to the job market than millennials and Gen Zers.
The numbers behind the argument are large. Baby boomers account for about 52% of all U.S. household wealth, control about 54% of household stocks and mutual funds, and own about 41% of all household real estate. They also hold around $3.1 trillion in money-market funds, or roughly 60% of the household total, while the Silent Generation holds another 16%. Much of the Silent Generation’s $20 trillion is expected to pass on to boomer children, reinforcing the concentration of wealth among older generations.
That is why Yardeni draws a line from wealth to spending. He says consumer demand is increasingly being supported by accumulated retirement wealth rather than labor income, and that higher rates have done less to slow spending than many economists expected because they also raise income for a large slice of older households. For people living off savings, bond income and cash balances, rates are not only a cost. They are also a source of income.
There is also a housing angle that helps explain the split. High mortgage rates are pushing millennials and Gen Zers out of the market, while older homeowners are reluctant to give up low mortgage rates and are staying put instead of downsizing. That keeps housing supply tight and helps support prices, which in turn protects the balance sheets of the same households already driving consumption. Yardeni’s G-shaped economy is really a claim that the wealthiest and oldest consumers are now carrying more of the economy than the workers who usually get the headlines.
The other force is AI, which Yardeni treats as a second engine of growth rather than a competing story. A handful of hyperscalers are on pace to spend more than $1 trillion next year, adding a capital-spending surge on top of the boomers’ consumption. The unanswered question is not whether older Americans matter to growth anymore. It is how long they can keep doing this if market gains cool, interest income fades or housing prices stop rising.
