Is the K Over 9/9/26

Summary

CNBC's Sharon Epperson examines whether the K-shaped economy is fading, using Bank of America Institute data showing lower-income after-tax wage growth surpassed higher-income households in July. She cautions that second jobs and inflation may flatter lower-income income and spending. A stock market correction could reverse the trend by reducing wealth-driven spending among higher-income households.

• Defines the K-shaped economy as higher-income households pulling ahead while lower-income households struggle.
• Bank of America Institute data show lower-income after-tax wage growth accelerated in July, surpassing higher-income households for the first time since December 2024.
• Caveats include the possibility of second or third jobs and inflation-driven spending.
• A stock market drop could spook wealthy consumers and reduce high-income spending.
• Consumer spending drives about two-thirds of US economic growth.