Evidence of K-shaped economy popping up everywhere
Evidence of K-shaped economy popping up everywhere
https://www.morningbrew.com/stories/2025/11/03/evidence-of-k-shaped-economy-popping-up-everywhere
By Holly Van Leuven
November 3, 2025
It means wealthy consumers do well and spend freely while lower- and middle-income people struggle and scrimp.
Recent earnings reports and consumer data show a bifurcation in the US that experts call a “K-shaped” economy. It means wealthy consumers do well and spend freely while lower- and middle-income people struggle and scrimp.
In the US’ current market realities, that looks like:
- 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.
Some of the sectors flashing “K”
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.”