{"id":2626,"date":"2026-07-09T22:30:33","date_gmt":"2026-07-09T17:30:33","guid":{"rendered":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/?p=2626"},"modified":"2026-07-09T22:30:33","modified_gmt":"2026-07-09T17:30:33","slug":"the-k-shaped-economic-divide-might-be-narrowing","status":"publish","type":"post","link":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/?p=2626","title":{"rendered":"The K-shaped economic divide might be narrowing"},"content":{"rendered":"<p><script>\r\n  atOptions = {\r\n    'key' : '644b717812d811d6a1c1fc5b6ccd6fa6',\r\n    'format' : 'iframe',\r\n    'height' : 90,\r\n    'width' : 728,\r\n    'params' : {}\r\n  };\r\n<\/script>\r\n<script src=\"https:\/\/www.highperformanceformat.com\/644b717812d811d6a1c1fc5b6ccd6fa6\/invoke.js\"><\/script>\r\n<br \/>\n<\/p>\n<p>For years, the economy has looked <a href=\"https:\/\/www.axios.com\/2026\/05\/01\/us-economy-spending-growth-income\" target=\"_blank\">K-shaped<\/a>. There&#8217;s new evidence that some of that divide is beginning to narrow. <\/p>\n<ul>\n<li>The wage-growth gap between lower- and middle-income workers has disappeared \u2014 with pay gains among lower-income workers nearly matching those of their higher-income counterparts.<\/li>\n<li>Spending growth among lower- and higher-income households is the most similar in years.<\/li>\n<\/ul>\n<p><strong>Why it matters:<\/strong> A resilient labor market is chipping away at one dimension of the K-shaped economy, even as the wealth divide remains firmly intact.<\/p>\n<hr>\n<p><img decoding=\"async\" src=\"https:\/\/images.axios.com\/J0zfc3IIRanRZCPnGPAhzrCoO00=\/2026\/07\/09\/1783612642105.png\"> <\/p>\n<div>Source: Bank of America Institute<\/div>\n<p><strong>By the numbers: <\/strong>Bank of America Institute, drawing on anonymized customer deposit account data, <a href=\"https:\/\/institute.bankofamerica.com\/content\/dam\/economic-insights\/monthly-employment-report-june-2026.pdf\" target=\"_blank\">estimates<\/a> that lower-income households saw after-tax wage growth accelerate to 4.1% in June, up from 2.9% in May. <\/p>\n<ul>\n<li>That compared with 3.4% for middle-income households and 4.2% for higher-income households \u2014 the narrowest divide between low-income workers and their higher-earning counterparts in years.<\/li>\n<\/ul>\n<p><strong>PNC, using its own customer data, <\/strong><a href=\"https:\/\/www.pnc.com\/content\/dam\/pnc-com\/pdf\/aboutpnc\/EconomicReports\/consumer_health_check\/PNC_Research_Consumer_Health_Check_June_2026.pdf\" target=\"_blank\">says the spending gap <\/a>between lower- and higher-income households is the smallest in three years. <\/p>\n<ul>\n<li>The firm&#8217;s senior economist <a href=\"https:\/\/x.com\/BrianLe_Blanc\/status\/2075211451770249390?s=20\" target=\"_blank\">previewed the June data <\/a>on X, noting that the spending gap \u2014 excluding spending on gasoline \u2014 narrowed even further last month.<\/li>\n<\/ul>\n<p><strong>The intrigue: <\/strong>Bank of America attributes the wage convergence to stronger hiring and job-switching among lower-income workers, while PNC says healthier labor market fundamentals are increasingly underpinning consumer spending.<\/p>\n<ul>\n<li>BofA cautions that part of the acceleration may be mechanical rather than economic, if lower- and middle-income workers adjusted their tax withholdings to reflect changes under the One Big, Beautiful Bill Act.<\/li>\n<\/ul>\n<p><strong>The bottom line:<\/strong> The &#8220;K&#8221; hasn&#8217;t vanished. Stocks, home equity and other gains still accrue overwhelmingly to affluent households, while lower-income workers have not felt a similar flush of wealth from the housing or stock market booms.<\/p>\n<script async=\"async\" data-cfasync=\"false\" src=\"https:\/\/pl30214220.effectivecpmnetwork.com\/9ab3d4df8a7e1a6171e16ddbf732cc19\/invoke.js\"><\/script>\r\n<div id=\"container-9ab3d4df8a7e1a6171e16ddbf732cc19\"><\/div>\r\n\n","protected":false},"excerpt":{"rendered":"<p>For years, the economy has looked K-shaped. There&#8217;s new evidence that some of that divide is beginning to narrow. The wage-growth gap between lower- and middle-income workers has disappeared \u2014 with pay gains among lower-income workers nearly matching those of their higher-income counterparts. Spending growth among lower- and higher-income households is the most similar in&#8230;<\/p>\n","protected":false},"author":1,"featured_media":2627,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.axios.com\/J0zfc3IIRanRZCPnGPAhzrCoO00=\/2026\/07\/09\/1783612642105.png","fifu_image_alt":"","footnotes":""},"categories":[17],"tags":[],"class_list":["post-2626","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-political-news"],"brizy_media":[],"_links":{"self":[{"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/posts\/2626","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2626"}],"version-history":[{"count":0,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/posts\/2626\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/media\/2627"}],"wp:attachment":[{"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2626"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2626"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2626"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}