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Income gap increases in Q3
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News – Investment Executive
The group of households in the bottom 20% of income distribution were the only one that did not increase their average disposable income in the third quarter of 2025 (-0.5%).
On the other hand, average disposable income for households in the top 20% of income distribution increased the most in the third quarter of 2025 relative to a year earlier (4.3%).
Their equity and investment fund holdings also saw strong gains, as they tended to benefit more from equity markets rather than from interest-bearing deposits relative to lower income households.
That group’s average consumption expenditures growth (4.2%) outpaced disposable income growth significantly (0.7%).
The reductions in the debt-to-income ratio were due to strong income gains that outweighed debt accumulation.