The K-shaped gap widens: Here's what to know

Summary

Steve Liesman discusses new data showing a widening gap between higher and lower income Americans, with wage gains for the wealthy far outpacing those for lower-income workers. The K-shaped recovery is reflected in Bank of America and ADP wage data, as well as New York Fed spending data showing lower-income households cutting back on gas consumption. The segment highlights the divergence in consumer health across income groups.

• Bank of America data shows 6% wage growth for high-income vs 1.5% for low-income.
• ADP confirms a widening wage gap, with top earners making 6.4x bottom earners, up from 5.9x in 2023.
• New York Fed data shows wealthy households maintained gas consumption while lower-income cut back.
• Real incomes have turned negative in four of the last six months due to inflation.
• Retail earnings paint a mixed picture: Disney, Starbucks, Hershey, GM see healthy consumer, but Whirlpool reports recession-level declines.
• The K-shaped economy is persistent and widening, with no clear explanation yet.