{"id":466082,"date":"2026-02-13T10:43:16","date_gmt":"2026-02-13T10:43:16","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/466082\/"},"modified":"2026-02-13T10:43:16","modified_gmt":"2026-02-13T10:43:16","slug":"a-k-shape-within-a-k-shape","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/466082\/","title":{"rendered":"A K shape within a K shape"},"content":{"rendered":"

Earlier this week, the Census Bureau brought news of unexpectedly flat retail spending in December. Now, the Bank of America Institute is giving us a look<\/a> into the spenders themselves.<\/p>\n

In looking at customers\u2019 credit and debit card spending, Bank of America economists noticed a growing divide between high- and low-income customers \u2014 that classic K shape<\/a> we talk about so much about on our show \u2014 but also increasing signs that things are getting difficult for middle-income households, too.<\/p>\n

David Tinsley at the Bank of America Institute is starting to notice that a simple K shape doesn\u2019t totally summarize the situation anymore.<\/p>\n

According to January customer data, middle-income households\u2019 spending growth was just 1%, compared to 2.5% for higher-income households.\u00a0<\/p>\n

\u201cSo, if you like, there’s a K shape opening up between higher-income households and middle-income households as well,\u201d Tinsley said.<\/p>\n

A K within a K is forming, and if their spending continues to soften, Tinsley said, \u201cthe economy would struggle to maintain overall consumer momentum.\u201d\u00a0<\/p>\n

At Big Chalk Analytics, which works with retailers, restaurants, and companies that make packaged goods, Rick Miller said he doesn\u2019t really think of spending as a straightforward K these days either. <\/p>\n

\u201cIn our data, we see that there are household budgeting stresses happening across the spectrum of incomes,\u201d Miller said.<\/p>\n

Which is why he likes to split consumers up by whether or not they\u2019re making \u201ctrade-offs.\u201d<\/p>\n

He said trade-off consumers are actively cutting the size of the products they\u2019re buying. Going for a 12-pack of soda instead of a 30-pack, for example. They\u2019re also visiting more stores in search of the best deals.\u00a0<\/p>\n

\u201cAbout a year ago, at this time, we saw about 19% of households that were actively switching<\/a> from premium brands down to store brands. That number’s jumped up to almost 22%,\u201d Miller said. So, he said, retailers are promoting their own store brands.<\/p>\n

Jessica Ramirez, co-founder of the advisory business The Consumer Collective, said those who are still spending are focused on value, which means retailers are looking hard at the assortment of products they offer.<\/p>\n

\u201cWhat does my assortment look like going forward? So, where is there going to be an opportunity? How do I need to downsize my assortment in order not to take on losses?\u201d Ramirez said. <\/p>\n

She said among fashion companies, for example, their strategy this time around is not to mark everything down like they did in the last recession but instead to plan inventories better to meet consumers where they are.<\/p>\n

Related Topics<\/p>\n","protected":false},"excerpt":{"rendered":"Earlier this week, the Census Bureau brought news of unexpectedly flat retail spending in December. Now, the Bank…\n","protected":false},"author":2,"featured_media":466083,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,16306,101,216902,133986,133896],"class_list":["post-466082","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-consumer-spending","tag-economy","tag-household-budgets","tag-income-disparity","tag-k-shaped-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/466082","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=466082"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/466082\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/466083"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=466082"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=466082"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=466082"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}