The K-Shaped Economy Is Not in Your Imagination

Open the financial pages and a strange creature stares back at you. The S&P 500 has climbed over 90 percent in three years. The top 10 percent of earners now account for nearly half of all consumer spending. Moody’s, Morgan Stanley, and the New York Fed agree on the shape of the thing: the economy has split in two. Asset-holders ride the upper arm of the “K” upward while wage earners slide down the lower one, watching groceries, rent, and insurance devour paychecks that no longer stretch.