The US upper middle class now leads as the biggest income group

A recent report reveals that the American middle class is shrinking, and that the upper middle class is now the largest US income group.

The analysis, conducted by the American Enterprise Institute (AEI), defines the upper middle class as a family of four, earning between $153,864 and $461,592.

According to the data, the middle class contracted as upward income mobility increased.

Since 1979, the share of upper-middle-class households has tripled, now sitting at 31% and representing the nation’s largest economic group.

Additionally, the rich now make up 3.7% of US households, which is 12 times higher.

Working women drive the advancement
In 1970, only 11% of women held college degrees, a figure that has climbed to 40% today, fueling the rise of high-earning, dual-income families.

Despite these gains, many Americans still feel financially squeezed by the skyrocketing costs of essentials like housing, healthcare, and education.

A recent LendingTree report estimated the cost of raising a child to age 18 will hit $303,418 in 2026. It averages to $16,857 per year and is a 2% increase from 2025.

While the upper middle class may struggle with reaching traditional milestones, the research suggests that, on paper, more Americans are wealthier than ever before.