Bessent says K-shaped economy is ‘over’
Bessent cites Bureau of Labor Statistics data showing 25th percentile weekly earnings rose 5.5% while 75th percentile pay increased 1.5%.
- Earlier this week, Treasury Secretary Scott Bessent declared the 'K-shaped' economy over in a CNBC interview, asserting a new 'C-economy' is emerging where lower-end wage earners are 'finally clawing it back.'
- The 'K-shaped' label has described diverging economic fortunes between higher- and lower-income Americans in recent years, reflected in wealth accumulation and spending patterns. Bessent argues lower earners are reversing this trend.
- Bureau of Labor Statistics data shows weekly earnings for the 25th percentile rose 5.5 percent versus 1.5 percent for the 75th percentile. However, consumer prices rose 3.9 percent, complicating the wage-growth narrative.
- Moody's Analytics chief economist Mark Zandi challenged Bessent's assessment, declaring the K-shaped economy 'firmly intact' as recently as June, arguing the top 20 percent earning more than $175,000 annually continue driving growth.
- National Retail Federation chief economist Mark Matthews cautioned that 'softening wage growth' coupled with 'sticky inflation' could challenge the second half of the year, though lower-income consumers have increased discretionary spending versus last year.
9 Articles
9 Articles
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Economists contradict President Donald Trump’s Treasury Secretary Scott Bessent after he insists ‘the K-shaped economy is over’
President Donald Trump’s Treasury Secretary Scott Bessent has pushed back against concerns that his economic agenda continues to leave lower-income Americans behind, declaring that the long-discussed “K-shaped economy is over.” His remarks, made during a recent CNBC interview, drew swift responses from several prominent economists who argued that the evidence does not yet support that conclusion, pointing to persistent disparities in consumer sp…
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