While most US consumers are still sticking closely to their budgets, top earners are spending to make up the difference. Americans in the top 10% income bracket made up nearly half (49.2%) of total consumer spending during Q2, per an analysis of recent Federal Reserve data by Moody’s Analytics Chief Economist Mark Zandi.

That number is up from 48.5% in Q1, highlighting the growing divide between high-income earners and middle/lower-income earners in the country. Taking inflation into account, spending from households earning less than $175,000 a year has remained relatively steady since the pandemic, meaning there hasn’t been much real growth—except at the very top.

Conflicting economic data

Commerce data released yesterday showed that spending at US retailers jumped 0.6% last month, more than double economists’ expectations of 0.2%. Sales were up across most categories, with only some retailers, like department and furniture stores, reporting drops:

• Online shopping had the biggest jump at 2%.
• Restaurants and bars filled up their late-summer patios with a 0.7% increase in spending.

And yet, Americans are increasingly falling behind on car loans and credit card payments, while hiring is slowing at an alarming pace, and the country is losing faith in capitalism overall. Meanwhile, high earners, who park their cash in places less liquid than the entryway table coin bowl, are benefiting from record-high stock prices and soaring home prices, which allows for more spending in an otherwise shaky economic environment.

What does this mean for the US economy? Well…it wouldn’t be most economists’ first choice. While consumer spending might appear strong right now, it’s balancing on one leg. If the top 10% of consumers decide to pull back due to changes in the stock market or more layoffs, it could, in the worst-case scenario, hurtle the US into a recession.—MM

Israel launched a ground offensive in Gaza City. Following weeks of heavy bombardment and calls for civilians to evacuate, Israel began its ground incursion in Gaza’s most populous city, arguing it was necessary to stop Hamas from planning more attacks. Hundreds of thousands of Palestinians were photographed fleeing southward, clogging roadways. The operation, which Israeli Prime Minister Benjamin Netanyahu admitted will take “several months” and could leave the country isolated from allies, was condemned by the UK, Germany, and other European nations. Axios reported that the US supports the operation, but prefers that it end quickly. When asked about the news yesterday, President Trump did not offer a view. “I have to see,” he said. “I don’t know too much about it.”

Robert Redford died at 89. The Oscar-winning director of Ordinary People and star of countless iconic films like Butch Cassidy and the Sundance Kid and All the President’s Men died at his home in Utah “surrounded by those he loved,” his publicist said. Widely considered one of history’s greatest actors and among the most influential people in Hollywood, Redford leveraged his stardom in the late 1970s to create the Sundance Institute and accompanying film festival to support independent cinema. “The industry was pretty well controlled by the mainstream, which I was a part of,” he told the Associated Press in 2018. “But I saw other stories out there that weren’t having a chance to be told and I thought, ‘Well, maybe I can commit my energies to giving those people a chance.’” He was awarded the Presidential Medal of Freedom by President Obama in 2016.

Details emerge on the US’ TikTok deal with China. A day after the White House announced it had the “framework” of a deal with China to divest its US TikTok business, the Wall Street Journal reported some of the specifics. Per the WSJ, the app’s US business would be controlled by a consortium including cloud giant Oracle and private investment firms Silver Lake and Andreessen Horowitz. Users in the US would reportedly have to move over to a new app, which TikTok is already testing. A new board would comprise mostly Americans, one of whom would be appointed by the government. With a deal in the works, President Trump extended the deadline for China’s ByteDance to divest the app’s US operations or be shut down for the fourth time, to Dec. 16.—AE

One of the most popular EVs is now being investigated for its door handles, and no, it’s not because you couldn’t figure out how to get into the Uber that one time. Yesterday, US regulators said they launched a probe into some Tesla vehicles following allegations that defective doors trapped people—frequently kids—inside.

It comes just days after Bloomberg reported several instances of Tesla riders getting hurt or dying from fire-related injuries after crashes that allegedly rendered the electronic doors useless from both sides.

For now, the National Highway Traffic Safety Administration’s investigation is focused on reports of 2021 Model Y SUVs failing to open externally, but the agency suggested that could change. Tesla hasn’t commented. According to the NHTSA:

• Nine owners of the 2021 Tesla Model Y have reported instances of the car not opening from the outside. Many were parents who had just buckled in young children.
• The initial review suggests this happens when the doors don’t receive enough battery voltage, though no vehicle owners reported seeing a battery warning before the incidents.

Add it to the list: The NHTSA is separately investigating Tesla’s Full Self-Driving feature following a fatal pedestrian collision in 2023. The agency also said last month that it would examine delays in Tesla’s reporting of car crashes involving its self-driving tech.—ML

OpenAI announced new safety measures for ChatGPT yesterday that include parental controls the company plans to roll out by the end of the month, and a long-term goal of developing age prediction technology that can deduce if a user is actually three kids in a trenchcoat.

The company says that if the new technology, which it hopes to have ready by the end of the year, has any doubt if a user is a minor, ChatGPT will “default to the under-18 experience,” and block graphic content. In some countries and situations, users will be asked to verify their age with an ID.

Parents: New parental controls include the ability to specify how ChatGPT responds to their child, disable features like memory and chat history, and receive notifications if the child is in acute distress and allow for law enforcement to become involved.

Mental health safeguards: ChatGPT has been accused of encouraging or doing nothing to prevent self-harm, suicide, or even homicide, which has led to numerous lawsuits. In response, OpenAI said it’s working on a GPT-5 update that would deescalate potentially dangerous situations and make it easier for users to reach emergency services and trusted contacts.

Zoom out: The new guardrails were unveiled, probably not coincidentally, hours before a Senate Judiciary Committee hearing to examine the harm of AI chatbots.—DL

The tool you used to download a pirated copy of the 2001 System of a Down album Toxicity is purchasing the naming rights to the ignominious music festival with the cheese sandwiches. No, it’s not just you—it does sorta make sense.

First of all, surprise! LimeWire still exists. But now it’s an NFT platform, apparently with money to spare. The company didn’t specify what it intends to do with the Fyre Festival brand, but it did assure that it’s not bringing the festival itself back.

In April, about three years after getting out of prison for wire fraud, Fyre Fest co-founder Billy McFarland said he was putting the event’s IP up for auction on eBay, which yesterday LimeWire was revealed to have won. “This sucks,” McFarland said on a livestream when the sale closed for $245,000. “It’s so low.”—AE