On The Market

The “K-Shaped” Economy: Why the Middle Class Is Getting Crushed

10 snips
Dec 4, 2025
Discover the fascinating dynamics of today's K-shaped economy, where soaring asset prices starkly contrast with the struggles of the average American. The startling statistic shows that the top 10% control half of all spending, highlighting the widening wealth gap. Explore how rising home prices impact first-time buyers, who now average 40 years old. Learn about the heavy debt burdens faced by lower-income households and the risks this poses to the stability of our economy, which increasingly relies on a small elite.
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INSIGHT

K-Shaped Economy Defined

  • The K-shaped economy means one part of the economy climbs while the other falls, producing a sharp split in outcomes.
  • Wealthy asset owners are prospering while ordinary workers and the middle class face declining financial health.
INSIGHT

Consumption Concentrated At The Top

  • The top 10% of Americans now account for roughly half of all consumer spending.
  • That concentration means about one third of U.S. GDP depends on decisions by just 10% of households.
INSIGHT

Five Years Of Inflation Eroded Wages

  • Cumulative inflation over five years has eroded purchasing power significantly despite recent lower annual rates.
  • Wages have not kept pace, leaving many households with less real spending power than before.
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