Americans were spending their asses off in Q4, preliminary US GDP data released on Thursday suggested.

Although the headline growth readout disappointed, the personal consumption print was a scorching-hot 4.2%.

That was the briskest since Q1 of 2023. The same was true, by the way, of Q3‘s personal spending readout, which is to say the spending impulse feels pretty escalatory.

Do note: 4.2% counted as a full percentage point ahead of consensus. Economists expected a 3.2% pace from the advance read, which may (or may not) be revised lower as the BEA incorporates more data over the next several weeks.

One more time: The term structure of household debt in America’s conducive to spending by the well-to-do, who’re still passively playing an arb between low-rate, fixed payments on an appreciating asset (i.e., homes) and what still count, even after 100bps of Fed cuts, as the highest money market fund rates in decades.

You might argue that some of the spending uptick in Q4 was pull-forward ahead of tariffs, or just holiday consumption. But as I’m sure a lot of readers can attest, if you have 800+ credit, a house and assets (i.e., if you’re well-off), you’re getting offers every, single day from financial institutions inviting you (begging you) to borrow money from them, interest-free for what, in some cases, are very long honeymoon periods, and spend it.

Needless to say, it helps that the rich continue to enjoy quarterly windfalls in excess of $1 trillion, $2 trillion or more from rising stock prices. If you didn’t read “Stock Bubble Is ‘Self-Fulfilling Catalyst’ For American Exceptionalism,” I encourage you to peruse it at your leisure, but the figure below captures the gist of it.

The most recent Fed data on household wealth — “current” through Q3 2024 — shows the cumulative gain in the value of household equity holdings since the Q1 2020 lows on Wall Street sums to an astounding $29.12 trillion. $12.5 trillion came over the four-quarter period ending in September, and the bonanza continued in Q4 despite a lackluster December for equities.

Whatever “Mr. Market” focuses on in Thursday’s BEA release, the Fed, if they have any sense about them, will take note of the spending impulse, which’ll get a sentiment kicker when the GOP extends the Trump tax cuts.

As noted above, the headline real growth print for Q4 came in below estimates at 2.3%. The figure below shows you the breakdown, by contribution.

Personal consumption accounted for 2.82ppt of the headline, which is to say all of it, and then some. Inventories were a drag to the tune of almost a full percentage point.

The key “final sales to private domestic purchasers” line showed a second consecutive gain of 3% or more (and a fourth in five if you round up Q1 2024’s 2.9% print).

Residential investment picked up for the first time in nearly a year, but business investment contracted. As the figure below shows, Q4’s 2.2% decline was the first drop in more than three years.

You can write that off. The “equipment” line showed a near 8% annualized drop. I assume that had something to do with work stoppages at Boeing.

What happens from here’s anyone’s guess (and yes, I realize that’s a hopelessly meaningless “assessment”), but the preliminary read on Q4 growth plainly suggested the upper-end of the income distribution in America’s nowhere near tapped out, even if some of last quarter’s spending can be attributed to lower-income households buying things like durables on the assumption prices will rise in the event of a(nother) trade war.

Uncertainty could weigh on business investment going forward, and it’s possible the proverbial “bill” for the Fed’s aggressive hiking cycle will come due this year to the detriment of jobs and, in short order, consumer spending. But for now, Americans are in “spend it if ya got it” mode. You only live once, after all.

A word of caution for the YOLO crowd: The old “you can’t take it with you” adage is half-right, but it’s half-wrong. The problem comes when you’re still here and the money’s gone.