The Odd Years Eight months into Trump 2.0, the economy is great for the top 10% and meh for everyone else
Sep 30, 2025
Heather Long, Chief Economist at Navy Federal Credit Union and former Washington Post correspondent, discusses the current economic landscape under Trump's second term. She highlights a K-shaped recovery where the wealthy flourish, while middle-income families struggle. Long delves into the uncertain impact of tariffs and inflation on household budgets. She also shares insights on AI's disruption to the job market, emphasizing the risks for new graduates. The conversation underscores the fragility of economic growth relying on the top tier.
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K-Shaped Economy Driven By Superstars
- The economy is K-shaped with a handful of superstar firms and wealthy consumers carrying growth.
- Most households (the bottom ~80%) face stagnant spending and rising anxiety despite headline gains.
Top Earners Mask Broader Weakness
- Households earning roughly $175,000+ are still splurging while the rest tighten budgets.
- That divergence means headline indicators like the stock market can mask broad consumer weakness.
Inflation Surge Explains Most Household Strain
- About 90% of the pain households feel comes from the big inflation surge since 2020–2023.
- Even modest price increases (e.g., $10 shoes to $14) heighten fear because families have little buffer left.