High earners drive the latest retail surge, leaving others behind
TL;DR
A New York Fed analysis using Numerator EHIs shows that since 2023, retail spending growth has been a K-shaped pattern: high-income households (>$125,000) led nominal and real spending growth, while middle- and low-income groups lagged or contracted in real terms. The divergence widened after pandemic-era subsidies ended, and inflation hit lower-income groups harder due to income-specific price pressures. The study highlights macro risks from concentration of spending in a small segment and points to policy implications, with a companion post exploring the mechanisms behind this heterogeneity.
Topics:businesseconomics#consumer-spending#economics#ehis#income-groups#k-shaped-economy#real-spending
- Tracking the K-Shaped Economy: Who’s Driving Spending? Liberty Street Economics
- The 'K-shaped' spending trend is real — but it's been here since 2023: New York Fed Yahoo Finance
- K-shaped economy is real, per New York Fed research Axios
- Explaining the K-Shaped Economy: What’s Behind the Divide? Liberty Street Economics
- Two harsh realities are keeping lower earners stuck while the wealthy pull ahead Business Insider
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