Everyone is so focused on inequality in the US, and for right reasons. However, German social welfare state has its headwinds due to rising commodity prices too. Nice charts from UniCredit, click on charts to enlarge.
Apart from the psychological effects of perceived inflation on consumer climate, however, the surge in prices of daily essentials is in fact having a disproportionately negative impact on households’ propensity to buy. In general, consumers with lower household incomes exhibit the highest propensity to consume. That means that they use incrementally available funds more for consumption. Households with higher incomes, in contrast, save a rising percentage of the incremental income. This is reflected in the personal savings rates by household income classes calculated by the Federal Statistical Office as part of its sample survey of income and expenditure (see chart next page). And higher energy and food prices hit low income earners especially hard. The share of expenditures in total disposable income varies considerably according to the level of income. While the share for households with a monthly income of between EUR 5,000 and EUR 18,000 is "only" just shy of 13%, the number for the lowest income class is a very high 35.5%.
While the savers, often bailed out by governments, are fearing the destructive effects of negative real rates and pile into real assets, also raw commodities, the payers of these policies are lower income households.