Bessent Declares K-Shaped Economy Over as Fed Data Still Shows 3.6% vs 3.9% Wage Gap
Updated
Updated · Fortune · Aug 5
Bessent Declares K-Shaped Economy Over as Fed Data Still Shows 3.6% vs 3.9% Wage Gap
1 articles · Updated · Fortune · Aug 5
Summary
Scott Bessent said the K-shaped economy is "officially over," arguing the bottom 25% of workers have posted a 2% real wage gain and that lower earners are catching up.
Treasury and White House claims hinge on the One Big Beautiful Bill Act, which advertised average 15% tax cuts for households earning $15,000 to $80,000 and up to $1,500 more annual take-home pay for tipped and overtime workers.
June data from the Atlanta Fed still showed lower-wage workers trailing: the bottom quartile's 12-month wage growth was 3.6%, versus 3.9% for the top quartile, with no 2026 month showing the bottom outpacing the top.
Wall Street economists also say the Iran war's hit to gasoline prices has largely erased the bill's consumer windfall, even as Bank of America sees some narrowing in spending gaps.
Broader wealth and spending trends still favor higher earners: Moody's estimated spending by households making $200,000 or more rose 6.5% in the year through Q1 2026, while the bottom 80%'s inflation-adjusted outlays were flat.