Summary
The U.S. economy is increasingly divided, with wealth concentrated at the top while lower-income households struggle. This division, often called a "K-shaped" economy, means that some people are doing really well while others are having a tough time. Experts warn this gap could lead to significant economic problems.
Key Facts
- The term "K-shaped" describes an economy where wealth grows for the rich, but poor households face difficulties.
- Investment and stock market gains are strong, but many low-income households struggle financially.
- Ohio State professor Lucie Dunn suggests this growing gap might lead to a crisis, with the middle class shrinking.
- More Americans with weaker financial backgrounds are taking on loans, according to TransUnion data.
- Wage growth has slowed more for low-income workers compared to middle- and high-income workers.
- High-income consumers are spending more, while lower-income consumers cut back on non-essential purchases.
- Nearly half of consumer spending comes from the top 10% of earners, keeping overall spending strong.
- Economic experts warn that rising inequality could become a major problem for the economy.
