Gen Z and millennials are leading America's economic recovery

• Millennials and Gen Z are spending more than they did pre-pandemic, American Express CEO Steve Squeri said.
• Younger workers are piling into jobs on offer amid claims of a widespread labor shortage.
• It's good for the economy, which needs Americans to spend to fuel an economic boom.

Millennials and Gen Z are going on a spending spree. They're also going back to work.

The two generations are now spending more money than they did before the pandemic, American Express CEO Steve Squeri said during a recent virtual investor conference, as reported by Bloomberg.

"We assumed there was such pent-up demand - not only for travel, but such a pent-up demand for consumer goods - that the US recovery would be like it is right now," Squeri said, adding that millennials and Gen Z were spending 125% of their pre-pandemic levels.

Meanwhile, the teenage cohort of Gen Z is leading the job market recovery. Employment is booming among the teenagers, as the last two jobs reports showed. Bloomberg's Conor Sen writes that older Americans will likely follow suit. In May, the jobless rate for workers aged 20 to 24 was higher than the jobless rate for teenagers for the first time ever.

It's all good news for the economy, which needs Americans to spend to propel its recovery forward - and needs jobs to be filled to put a floor under that spending. The country is currently on the verge of an economic boom, thanks to a lockdown lift and increasing vaccination rate, but just how big that boom will be depends in part on how much Americans are willing to part with the $2.6 trillion in excess savings they're currently sitting on.

It seems that the younger crowd is much more willing to view its pandemic savings as deferred income than as wealth. Higher-income millennials are planning to spend the most, according to a recent report by McKinsey & Company. It found that discretionary spending is already on the rise again, and more than than half of US consumers anticipate spending extra by splurging or treating themselves.

Read more: Wealthy millennials are set to drive the post-pandemic travel boom, survey finds

Considering that millennials are America's largest generation and hold the most spending power, and that the wealthy have recovered the best in America's K-shaped recession, it makes sense that wealthy millennials could be the key to driving America's post-pandemic recovery. Being wealthy and a millennial puts one in a prime position to spend, especially considering that some of this cohort had saved up to $3,000 a month during lockdown last year.

One sector where affluent millennials plan to spend is travel. A survey from Accenture and TripAdvisor found that high-earning millennials are most likely to spend big on travel this year, comprising the highest rate of luxury bookings (trips costing at least $5,000) among all other generations surveyed.

But, as Squeri's comments indicate, Gen Z is also playing a big role in driving the economy forward. While the generation doesn't yet have as much purchasing power as millennials, it's already making a dent in consumer spending and influence, setting the generation up to take over the economy in a decade. They have the fastest-growing income, per a Bank of America Research primer on the generation, called "OK Zoomer."

Between Gen Z and millennials, America's recovery lies in youthful hands.