K-shaped economy

New data suggests that the spending gap between wealthy and lower-income Americans, previously described by the 'K-shaped economy,' may be narrowing. However, economists disagree on what caused this shift or if it is sustainable, noting that higher-income consumers still drive the majority of consumer spending. Concerns remain regarding persistent inflation, wages, and reliance on credit for maintaining general household spending.

The debate over whether the U.S. economy remains K-shaped (diverging outcomes for high and low earners) or has shifted to a C-shaped (converging outcomes) continues. Treasury Secretary Scott Bessent claims the K-shaped economy is over, citing wage growth for lower earners and moderating housing inflation, while analysts argue data shows limited convergence and persistent inequality.

Scott Bessent claims the K-shaped economy is over, asserting a C-shaped economy where lower-wage earners are catching up. However, data from the Federal Reserve Bank of Atlanta and analyses from Goldman Sachs and Morgan Stanley suggest wage growth disparities persist. Bessent credits the One Big Beautiful Bill Act for improving household finances, though its economic benefits may be offset by factors like gasoline price fluctuations.

China’s Politburo has outlined economic priorities for the second half of the year amid slowing GDP growth to 4.3% in Q2, the weakest since late 2022, and a K-shaped economy marked by strong exports and tech sectors versus weak domestic consumption and investment.

China's export boom is reaching its limits, prompting a shift to exporting factories, technologies, and brands. Weak consumer confidence and a prolonged property slump are reducing domestic demand, increasing reliance on overseas markets.

China is shifting from its traditional export model to exporting factories, technologies, and brands as economic limits emerge. Weak consumer confidence and a property slump are reducing domestic demand, forcing manufacturers to rely more on overseas markets.

Richard Clarida, a global economic adviser for Pimco, states that the US has a K-shaped economy with its branches diverging wider over the past six to seven years.

Former Federal Reserve Vice Chairman Richard Clarida, currently a global economic adviser for Pimco, discusses the Fed's recent decision, Chairman Kevin Warsh's communication strategies, and the K-shaped economy on Bloomberg Money.

The housing market is being driven by wealthy home buyers despite claims of an affordability crisis. An expert describes the market as a 'K-shaped economy' example.

The U.S. economy shows a significant disparity where the top 10% spend nearly as much on non-essential items as the bottom 70% combined, according to Bank of America's economists. The analysis highlights a widening wealth gap in household spending patterns.

Costco CEO Ron Vachris confirmed the $1.50 hot dog and soda combo will remain unchanged, a staple since 1985, with previous executives also assuring its price stability. The deal is seen as a symbol of economic stability amid rising food prices and a K-shaped economy.

US employers added 57,000 jobs in June, a significant drop from previous months, with the unemployment rate falling to 4.2% due to people leaving the labor force. Hiring in sectors like restaurants, bars, and hotels declined amid inflation and consumer spending shifts, while healthcare added nearly 47,000 jobs. A 'K-shaped' economy, where wealthier households outpace others, and AI implementation concerns may be influencing hiring decisions.

The top 20% of U.S. earners drive 60% of personal outlays, with their spending growth (8.3%) outpacing the bottom 80% (4.5%), as wealth tied to stock market valuations raises concerns about economic fragility. Moody’s chief economist Mark Zandi notes this 'K-shaped economy' persists, with the wealthy benefiting from asset gains while most Americans struggle with affordability.

The K-shaped economy remains 'firmly intact' as high earners drive spending, according to Moody's economist Mark Zandi. The analysis highlights ongoing economic divergence between different income groups.

The article discusses the K-shaped economy's impact on summer travel, where high earners enjoy luxury trips while others cut back. It advocates for 'satisficing'—accepting local, affordable options—to reduce FOMO and improve mental health and financial well-being.

The article examines whether a K-shaped economy, characterized by divergent performance across sectors or groups, is beneficial for China. It raises questions about the implications of such an economic structure for the country's growth and stability.

The article questions the reality of the K-shaped economy, noting that selling goods at rock-bottom prices can be profitable for UK retailers, potentially encouraging middle-tier chains to compete with discount stores.

A record 33% of U.S. household wealth was in stocks by the end of 2025, driven by an AI-driven market rally. However, the wealthiest 10% of households own 87% of this stock market wealth, exacerbating economic inequality and contributing to a K-shaped economy where GDP growth relies on wealthy spending.

The article discusses the K-shaped economy in Trump's America, where wealthy Americans benefit from a booming stock market while non-wealthy Americans face rising inflation and financial struggles. Trump's policies are cited as a key factor worsening this economic divide.

Low-income households in the U.S. are experiencing a significant rise in food insecurity, driven by a K-shaped economy. The Federal Reserve Bank of New York attributes this trend to growing economic disparities, with many Americans feeling worse off due to the crisis.

Americans are splurging on affordable luxuries like movies and collectible watches amid economic anxiety and inflation, sustaining consumer spending despite delayed major purchases. Economists describe this trend as a 'vibecession,' where high-income households maintain discretionary spending while lower-income consumers opt for smaller indulgences.

The article discusses the K-shaped economy in retail, where high-end and low-end segments perform well while the middle market struggles. This divergence reflects broader economic inequality and changing consumer spending patterns across different income levels.

Low-income households are reducing gas consumption due to surging prices, while wealthier households remain unaffected. The NY Fed reports a K-shaped economy at gas pumps. This indicates a disparity in spending habits between different income groups.

Homkes states that the K-Shaped Economy is here to stay, indicating a permanent change in economic trends. This shift may have significant implications for various industries and individuals. The K-Shaped Economy refers to a recovery pattern where different sectors experience disparate rates of growth.

The Federal Reserve Bank of New York confirms the existence of a K-shaped economy, where high-income households drive spending growth due to wealth gains from financial assets, while low-income households struggle with inflation. The divergence in spending patterns since 2023 highlights economic fragility and risks linked to market corrections.

The article discusses strategies to prevent the 'K-economy' from becoming more K-shaped, focusing on economic divergence and potential solutions to mitigate disparities.