Summary
The U.S. economy is showing signs of splitting into different levels, beyond just the rich and poor. A new report suggests middle-income families are falling further behind top earners, creating more economic layers.
Key Facts
- The U.S. economy is developing distinct financial tiers, not just a rich-poor divide.
- "K-shaped" economy refers to different economic experiences for various income levels.
- Bank of America reports middle-income earners lagging behind top earners in income growth.
- In January, spending growth gaps were the widest since mid-2022 between income groups.
- Higher-income households experienced a 3.7% wage growth year over year in January.
- Middle-income households saw only a slight wage increase of 1.6% in January.
- Rising housing costs are impacting middle- and lower-income groups significantly.
- About a quarter of lower- and middle-income households spend over half their income on rent.
