Updated

Updated · Business Insider · Aug 5

Bessent Says 5.5% Low-End Wage Gains Ended K-Shaped Economy as Data Still Shows Gaps

Updated

Updated · Business Insider · Aug 5

Bessent Says 5.5% Low-End Wage Gains Ended K-Shaped Economy as Data Still Shows Gaps

1 articles · Updated · Business Insider · Aug 5

Scott Bessent declared the K-shaped economy “over,” arguing outcomes are now becoming C-shaped as lower earners post stronger gains and housing inflation cools.
His case rests on 5.5% year-over-year wage growth for the lowest quartile of full-time workers, slower gains for higher-paid workers, and Trump tax changes such as no taxes on tips.
Broader data undercuts that view: Atlanta Fed earnings figures including hourly and part-time workers show the lowest earners have logged the smallest gains since late 2024.
Consumer spending still looks K-shaped, with Atlanta Fed research showing the top 40% of earners increased spending fastest from 2021 through 2025 while the lowest quintile lagged.
Economists say any shift looks modest at best—rent and other housing costs are still rising, sentiment has weakened across income groups, and lower earners continue to feel worse.

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With housing costs surging despite slower inflation, are we witnessing a true economic convergence or just a cleverly disguised wealth gap?

If wage gains trigger a loss in crucial benefits, is the so-called economic catch-up actually pushing lower-income families closer to the edge?

As technology boosts asset prices for the wealthy, can new economic policies ever truly close the stubborn divide in consumer spending?

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