Treasury Secretary Scott Bessent Claims K-Shaped Economy Is Ending
U.S. Treasury Secretary Scott Bessent stated that the so-called 'K-shaped economy'—characterized by divergent economic experiences between high- and low-income households—is over, with the U.S. now experiencing a more balanced or 'C'-shaped recovery. He noted that lower-income wage earners are seeing improved financial conditions compared to higher-income groups for the first time in months. However, economists remain divided on whether this marks a lasting shift. Some data suggests convergence between income groups—such as similar spending growth and rising wages among low-earners—but others caution against overestimating progress. FICO's Ethan Dornhelm highlighted that lower-income consumers are still showing signs of financial stress, including higher delinquency rates for mortgages and auto loans. The broader economic landscape remains challenging across income levels due to factors like housing affordability and inflationary pressures on groceries.
Topics: consumer spending C-shaped economy income inequality K-shaped economy