Goldman Sachs economists found that companies have increased price markups as consumer price sensitivity declined, driving profit margins higher. After-tax corporate profits as a share of value added doubled from about 5% in the late 1980s to over 10% recently. Over the same period, U.S. firms substantially raised markups, which is the amount by which prices exceed the marginal cost of producing goods and services.

The trend toward rising markups is partly explained by falling costs, but data shows customers are increasingly paying amounts that cover much more than production costs. This occurs despite sentiment surveys confirming consumers are aware of and complaining about rising prices.

Declining Price Sensitivity

Studies cited by Goldman economists show consumers' sensitivity to price has been on the decline. This trend is explained by rising incomes. Higher income raises the opportunity cost of time, leading consumers to search less for lower prices.

Economist Kunal Sangani estimates that increases in average income and income inequality can account for a roughly 8pp rise in the aggregate retail markup from 1980 to 2018. This means less price-sensitive households account for a larger share of total consumption.

Corporate Earnings Impact

The dynamic supports the K-shaped economic narrative, where higher-income cohorts drive spending while lower-income groups retrench. For investors, this environment supports sustainable earnings growth, which is bullish for stocks. Publicly traded companies remain effective at maneuvering in ways that grow earnings and improve shareholder value.

Nearly half of American consumers agree that a salary alone is no longer sufficient to make ends meet, necessitating side hustles to generate income, according to the TruStage 2026 What Matters Now study. The survey, conducted in partnership with Ipsos, reveals that 46% of Americans hold this view, an increase from 39% in 2022. This sentiment is particularly pronounced among Black consumers (58%), women (50%), Millennials (52%), and BIPOC consumers overall (50%). The findings indicate a significant shift in the American Dream, which is now fractured along lines of generation, race, and identity, with financial stability becoming the primary priority.

The study highlights that the definition of the American Dream varies significantly across demographics. For many, the focus has shifted toward financial security, with the top three dreams being having enough money to retire comfortably (35%), being debt-free (34%), and providing for a family (34%). Younger Americans prioritize homeownership, cited by 30% of Millennials and 28% of Gen Z. Meanwhile, Hispanic consumers are most likely to prioritize providing for family (40%), while Asian consumers focus on retirement (39%), and White non-Hispanic consumers emphasize retirement (38%) and being debt-free (36%).

Neurodivergent Americans, representing 21% of respondents, are carrying a heavier financial worry load despite having similar income levels and higher employment rates than their neurotypical peers. The study found that 34% of neurodivergent consumers feel anxious about their financial situation compared to 22% of neurotypical peers. Additionally, 46% are worried about job loss compared to 34% of neurotypical peers. This group also exhibits higher entrepreneurial tendencies, with 30% owning a business, nearly double the rate of neurotypical peers. However, they report lower satisfaction and trust in financial institutions.

The financial services landscape is undergoing an inflection point as alternative platforms gain traction. While credit unions continue to lead in satisfaction and trust at 77%, fintech and money movement platforms are growing in popularity. Money and payment services have increased their share of primary financial institution relationships from 2% to 12%, and fintech usage has grown from 13% to 17%. There is a widening satisfaction gap, with neurodivergent satisfaction at 56% compared to 68% overall, LGBTQIA+ satisfaction at 54%, and non-binary satisfaction at just 32%.

Key Findings by Demographic

The research indicates that consumers are increasingly seeking a consolidated, digital path for financial services, with social media and AI playing a growing role in product research and selection. TruStage emphasizes the need for financial service providers to understand these diverse realities with empathy and design simple, affordable solutions to help people protect what matters most.