Charge-offs at American Express (NYSE: AXP) are growing. Since the company tends to have customers at the high-end of the income scale, that means that the rich, or at least the well-to-do, are getting poorer.

The news says more about what is happening to the upper middle class than what it tells the market about American Express earnings. The stock market has already discounted the credit card company's numbers. AXP shares are down over half from their 52-week high.

According to The Wall Street Journal, "The percentage of loans deemed noncollectable in a pool on which American Express reports monthly performance data reached 6.7% in September, up from 3.6% a year earlier."

The news should be viewed as a ripple effect that could swamp earnings at companies from Tiffany's (NYSE: TIF) to Apple (NASDAQ: AAPL) If consumers who had money to pay bills on cards used for discretionary purchases with relatively high price tags then an entire level of the US economy is at risk. It has been assumed for several months that people with modest incomes were not going to be buying increasing amounts of consumer goods. Now the disease is spreading upward throughout the economic system.

An economic dip might be defined as a time when those with low incomes feel their ability to spend get tight. A recession can be defined as a time when almost no one has any money to buy anything. The American Express numbers put the economy into that second category.

Douglas A. McIntyre is an editor at 247wallst.com.