The burgers you buy at your favorite restaurant chain and the clothes you shop for may have increased in price, but that hasn’t stopped many consumers from buying them.

Retail and food service sales for August rose 0.6% month over month and 5% year over year, even though some businesses have started to raise the cost of their goods due to tariffs and consumers have seen drastic price increases since the pandemic began five years ago. The Trump administration has imposed 10% to 50% tariffs on imports from countries around the world, as well as tariffs on select products like steel and aluminum. 

Tariffs are a tax that U.S. importers pay to the U.S. government. To make up for that tax, these importers either eat the costs or pass them along to you in the form of higher prices.

While some people are getting priced out of certain goods and the labor market is slowing down, there are still some consumers with money to burn. The top 10% of earners now account for nearly half of consumer spending, according to an analysis from Moody’s Analytics out earlier this year. Thirty years ago, they accounted for 36%.

Higher-income consumers tend to own stocks, which have continued to climb, and they have access to “significant amounts of borrowing that others don’t,” said Michael Jones, an associate professor of economics at the University of Cincinnati. 

They are more likely to be homeowners, and homeowners are able to borrow a line of credit against the equity in their home. So as home prices have appreciated, higher-income consumers have been able to fuel consumer spending, Jones explained. 

Spending has also been doing well because real wages are still up annually, even though they declined from July to August, and people still have some money saved up from the pandemic, although most of these savings have been depleted at this point, Jones said. 

So does that mean companies have less of an incentive to lower prices if higher-income spenders can buy these goods anyways? 

Tariffs are one of the key factors here – these companies don’t really have the capacity to lower prices as input prices go up, Jones said. 

But if consumers are still spending, that’s not going to help either. “They're going to keep their prices where they are,” Jones said. 

Retailers like Levi’s have rolled out higher-priced products without seeing a decline in demand.  

"We are making a full-court press in selling higher full-price sales than we have done in the past," said Levi’s chief financial officer at a recent retail conference. "The Levi's consumer largely earns $100,000 and over. And that consumer we are seeing is generally resilient."

Dollar Tree has also added more expensive items that cost up to $7 now that more affluent consumers shop there. Households that make more than $100,000 a year are responsible for a “meaningful portion” of the company’s second-quarter growth, according to the company’s CEO. 

While richer consumers are able to afford higher prices, middle- and low-income consumers might have to rely on credit cards and go further into debt, said Marco Airaudo, an economics professor at Drexel University. 

When high-income spenders drive the economy, it makes the economy more vulnerable since it’s being fueled by a very small group of people, Airaudo said. 

And if prices go up because richer consumers are demanding more goods, then that will force middle- and lower-income consumers to settle on lower-quality products, he said. 

“These, to me, are substantial risks of having too much consumption concentrated at the top,” Airaudo said. 

Labor market data also reveals another side of the economy: Employers only added 22,000 jobs in August, and added 911,000 fewer jobs than previously thought from March 2024 to March 2025.