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Key Pointshttps://www.msn.com/en-us/money/economy/what-is-the-k-shaped-economy-and-why-is-it-a-problem/ar-AA1QpHuF
• Wages for the top 25% of the U.S. workforce are rising by 4.6% annually,
while the lowest quarter sees only 3.6% annual gains.
• Financial stress is increasing for lower-income households,
with 29% living paycheck to paycheck and a record 6.7% of subprime auto loans delinquent.
• The economy’s growth is increasingly reliant on affluent households,
as lower-income consumers face rising costs and reduced spending capacity.
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https://www.morningbrew.com/stories/2025/11/03/evidence-of-k-shaped-economy-popping-up-everywhere
-The affluent doing very well along with the booming stock market and the appreciation of their homes in the inventory-crunched real estate market.
-Nearly everyone else faltering due to a shaky job market, high interest rates, and/or inflation.
Auto: In September, the cost of a new vehicle passed the $50,000 mark for the first time, according to Cox Automotive’s Kelley Blue Book. And repossession volume passing through Manheim, the auction group owned by Cox, was up 12% through the end of September on an annualized basis, according to the Wall Street Journal’s deep-dive into the rise of auto repos.
Airlines: Delta Air Lines CEO Ed Bastian said that sales of premium seats would exceed those of coach seats for at least one or two quarters in 2026.
Food & bev: Coca-Cola CEO James Quincey told CNBC that sales of its premium brands, like Smartwater, Topo Chico, and Fairlife, are juicing the company’s sales, while Coke demand is up at dollar stores, as well as at amusement parks frequented by higher spenders.
Consumer goods: Apple grew by double digits last quarter, thanks to strong sales of the $799 iPhone 17. And while economist Leo Feler told Marketplace that “everyone has kept buying health and personal care items,” how and when they buy them has changed. Wealthier shoppers are making hauls at Costco, while budget-constrained shoppers use up everything at home before going shopping.
Zoom out: Economic trends suggest that the gap will widen rather than narrow. Economist Betsey Stevenson of the University of Michigan told Marketplace, “The real risk to a K-shaped economy is social and political instability."
Airlines? They are adding more and more first-class seats. On an A-320 /321 there might have been three or 4 first-class rows a few years ago. Now it’s 5 or 6 rows. Rarely did smaller short-haul flights offer first-class. Now most do. But I noticed on one recent flight that the legroom afforded first class flyers had shrunk a bit.
(Most of my recent flying has been on American.)