US middle class keeps shrinking as wealthy pull further ahead, Equifax data show

Advisors serving mass affluent and middle-income clients are facing a widening gap between the wealthiest households and everyone else, according to new first-quarter data from Equifax.

The credit bureau's Market Pulse Index, which blends anonymized credit, debt, income, and asset data with VantageScore insights to produce a single financial health score out of 100, slipped to 60.9 in the first quarter of 2026, down from 61.6 the previous quarter.

It was the second consecutive quarterly decline and the fall was recorded across every generation tracked.

The index sorts the credit-visible population into three groups: Thrivers, those scoring above 80; the Pivoting Middle, scoring between 50 and 79; and Strivers, scoring 49 or below.

While the overall size of the middle tier held flat quarter over quarter, the Thriver population shrank by 5% and the Striver population grew by 2%, a pattern Equifax says reflects consumers sorting toward the two ends of the financial spectrum rather than staying put in the middle.

Looking at movement over the six quarters from the third quarter of 2024 through the first quarter of this year, Equifax found that 97% of people who fell out of the middle tier into Strivers held less than $100,000 in assets.

By contrast, more than two-thirds of those who climbed from the middle into Thriver status came from households with over $1 million in assets, underscoring how much liquid wealth, rather than income alone, is now separating those pulling ahead from those falling behind.

"As the US continues to navigate a K-shaped economy, where different segments of the population experience divergent financial realities simultaneously, we see that reaching the top financial tier creates powerful momentum, much like compounding interest, with those with the greatest amount of wealth continuing to accumulate more,” said Emmaline Aliff, advisory leader at Equifax. “But for those who haven't reached the top financial tier, recent inflation and debt concentration are applying severe downward pressure. This pressure is contracting the size of the middle class."

Multigenerational issue

Every generation posted a lower index reading this quarter.

Millennials fell hardest, down 1.2% quarter over quarter to an average of 58.1, and this cohort also logged the steepest rate of significant point drops of any age group as they move through peak earning years without the inherited wealth cushion available to younger consumers. Millennials also make up the largest share of Strivers, at 7.59% of the total population, driven mainly by thin asset holdings.

Generation X slid 0.8% to 60.3, squeezed between peak career-stage debt and rising costs for essentials. Generation Z edged down just 0.1% to 58.9, though the cohort showed the widest swings of any generation, with 11.73% of Gen Z consumers moving upward, a trend Equifax links to proximity to family or community wealth safety nets. Boomers and older consumers remained the most resilient tier, dipping only 0.2% to 64.3, with as much as 69% of that population holding steady within their index range. Boomers also account for 3.80% of the total population within the Thriver segment, the largest share of any generation in the affluent tier.

Beneath the headline figures, Equifax pointed to a widening reliance on credit to bridge the gap between spending and savings. Personal savings fell to 745.6 billion dollars this quarter, less than half the 1,606 billion dollars recorded in mid-2021, even as overall consumer spending climbed to nearly 16.8 trillion dollars and bankcard balances hit a fresh high. Inflation ticked up to 3.3% during the quarter.

Consumer sentiment, meanwhile, moved in the opposite direction to the underlying data, rising slightly to a reading of 55.4 even as household financial strain deepened, a gap Equifax says illustrates why sentiment surveys alone can obscure the real state of consumer finances.