{"text":[[{"start":7.64,"text":"No idea has left a deeper mark on public conversations about markets and the economy in recent years than the “K-shaped economy”, a concept coined in late 2020. The notion is that since the pandemic shutdown the economy in aggregate has recovered strongly, but that conceals a deep rift. The top arm of the K — the richest top 10 per cent of families, say — is prospering tremendously, while the bottom half of the distribution languishes, punished by inflation without participating, as the rich have, in the boom in financial assets."}],[{"start":42.6,"text":"This idea has been used to explain everything from resilient consumer spending to corporate earnings surprises (good and bad), to our vexed political life. But there is not much timely data on the distribution of income and wealth, so K-explanations (or the rejection of them) have been more a reflection of the preconceptions of the explainer than a meaningful contribution to our understanding."}],[{"start":65.64,"text":"Last week, however, new data came in: the 2025 edition of the Federal Reserve’s triennial Survey of Consumer Finances. The SCF gives a multi-dimensional look at Americans’ households by income and wealth cohort, as well as by education, age, race and so on. A crucial takeaway: while the US remains a very unequal place, it has not been getting much more unequal. On most metrics, inequality has hardly increased since the pandemic, and on some it has fallen."}],[{"start":96.32,"text":"Start with income. For much of the past 30 years, the top 10 per cent of earners have seen a faster increase than the rest of the distribution. Their median income today, at $400,000, is five times that of families in the middle of the distribution. In 1989, when the study began, the multiple was four. Mean incomes (a measure influenced more by the very richest) follow a similar but more extreme pattern, with the top earning eight times what the middle does. But whether you look at medians or means, since 2019, income growth has been the same or slower at the top than at the bottom. And the authors note that in the past three years: “Families in the lower ends of the income and net worth distributions saw modest increases in median and mean income, while families in the upper ends saw declines.”"}],[{"start":143.96,"text":"Wealth — measured by net worth — is a more important metric, and here the survey tells a subtle but no less surprising story. From 1989 until 2013, the richest tenth grew their real net worth much faster than everyone else. In the past 12 years, however, the growth gap with most other cohorts has either closed or disappeared, depending on how you cut the data. And in the past three years, the authors of the study write, “wealth inequality appears little changed”."}],[{"start":170.92,"text":"Yes, the very richest are still accumulating many more dollars of income and wealth than everyone else, because they are growing from a much larger base. But in terms of the growth rate, the middle range is approaching or surpassing the top. In that sense, the recovery is shaped more like an E that’s leaning back a bit."}],[{"start":189.12,"text":"The survey also adds an important new data analysis: a distribution of consumer spending by wealth cohort. It finds that the highest-earning 10 per cent of the population account for about 28 per cent of all spending. That’s a lot, but recent estimates had put the share at 50 per cent, big enough to allow all the encouraging news about consumption growth to be (wrongly) waved away as an artefact of inequality."}],[{"start":212.44,"text":"Note three counterbalancing points. Most importantly, the bottom 25 per cent of the wealth spectrum has had an average net worth of roughly zero since the survey began. Some of this is down to young households that have not yet accumulated savings, but a lot of the country lives on a razor’s edge, particularly the less-educated and minorities. This is terrible but not new."}],[{"start":234.36,"text":"Next, keep an eye on the source of wealth. On the top half of the spectrum, recent increases have been driven by investment portfolios; further down, the dominant appreciating asset is the home. If higher interest rates mean an end to the steady house price appreciation of the past 15 years or so, the wealth gap could widen again. Finally, the rise in interest rates presents another threat to the poorest Americans. While household leverage — debts relative to assets — is falling, debt costs are rising, and this is showing up in increasing delinquencies."}],[{"start":266.6,"text":"Survey data is imperfect, but the SCF is a high-quality study and the trend is clear: while inequality remains very high, American families across much of the wealth and income spectrum have enjoyed real gains in the past decade. Let’s hope it lasts — and spreads to the Americans who are struggling the most."}],[{"start":284.76,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1792047220_4064.mp3"}