PHOENIX — A “K-shaped economy” means different groups are experiencing the economy differently, with top income earners doing better than those making less.
The numbers clearly show this divide. According to an analysis by Moody’s Analytics, the top 20% of earners make up 59% of consumer spending. The bottom 80% of earners only account for 41% of consumer spending.
The divide also appears in how Americans feel about the economy. Since April, Americans in the top third of stock ownership see an improving economy, but those who own no stock feel the opposite.
In wage growth, financial sector workers have seen pay rise 26% during the pandemic recovery, while retail workers saw 22% increases.
Though the difference seems small, financial sector employees start with higher average pay.
Housing shows the split, too. Smaller two-bedroom homes haven’t increased in value at all in three years, while homes with five or more bedrooms are up 6%.
One of the biggest risks is rising consumer debt levels, as most Americans spend more to cover basic expenses.
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