The Federal Reserve Bank of New York says having a college degree still matters to being one of the wealthiest Americans

Economists have cited a variety of factors over the past year to determine that today’s economy is one driven mostly by inequality, including rising stock prices and home values. Primarily, wealthy Americans benefitwhile inflation was most prominent in Grocery and restaurant prices rise.

But the variable that has arguably received the most attention has been consumer spending, specifically how it varies depending on the demographics in question. The Federal Reserve Bank of New York recently looked at this issue through the lens of educational attainment, and the findings suggest that while many young Americans are considering a career that does not require a bachelor’s degree, the ability to keep up with the economy still depends to some extent on an individual’s level of education.

In a dataset Released Tuesday, the Federal Reserve Bank of New York analyzed monthly consumer spending data for 200,000 Americans between January 2023 and December 2025. Adjusted for inflation, retail spending among Americans without a college degree rose about 4% during that period. But it rose about 6% for consumers with a college degree. Each month over the past three years, certificate holders have achieved an average increase in spending of 0.14% compared to the previous month, while their non-certificate counterparts have achieved just 0.05%.

“Despite the relatively tougher job market that college graduates will face in 2025, they continue to consume more than nongraduates do at the same or higher rate than they did in the past few years,” the Fed researchers wrote. “The trend difference in retail spending between college graduates and non-college graduates is consistent with the story of a K-shaped economy.”

Educated spending

Spending has been a key driver of the K-shape argument, which is seen as an explanation for why the economy continues to grow despite inflation and labor market headwinds. The top 10% of Americans now make up about 10% of the population 50% of spendingAccording to Moody’s analyses. But the New York Fed’s analysis is the first to look at consumer spending based on educational attainment.

Educational attainment has long been a major differentiator in the United States Where people livethey are Career statusAnd what do they have? Political ideologies turn out to be It often boils down to whether or not they have a college degree. The finding that those who have graduated from university have greater spending power is not necessarily new either. Even a decade ago, government researchers at the Social Security Administration showed this Lifetime profits For degree holders it can be anywhere from $630,000 to $1.5 million more than what high school graduates can expect.

But the new findings announced by the Federal Reserve come at a time when many young Americans are wondering whether college is worth it at all. New college enrollments are declining, some say Affordability concernsA Labor market tension at entry leveland concerns that artificial intelligence may provide some entry-level and white-collar jobs frequent.

Many young Americans choose alternatives such as community colleges, where new undergraduate students are enrolled Eclipse Those in four-year colleges last fall. Others choose Skills in craftswhere some blue collar jobs are seen as well-paid and better insulated from AI.

For students who decide to forego college, the latest research suggests that the worst option may be to interrupt their education altogether. In addition to the Federal Reserve’s recent findings on consumer spending, November data From the Federal Reserve Bank of St. Louis, he took a long look at the disparity in unemployment between high school and college graduates. The researchers found that the former consistently dealt with an unemployment rate at least 2.3 percentage points higher, a difference that becomes particularly evident during economic downturns.

To be sure, even though college students spend more than non-degree holders, that doesn’t necessarily mean they can, at least for younger graduates. Among habits such asCulture therapy“and”Spending is torture“In general, Generation Z appears to be more comfortable spending than saving compared to previous generations at the same age. Over the next few years, Generation Z is expected to become the The highest spending generation in historyAnd, over the next few decades, their combined income It may rise to $74 trillion. Whatever role Gen Z college graduates play in fueling the K-shaped economy today is likely to grow in the coming years.