The K-shaped economy isn't dead yet
Treasury Secretary Scott Bessent claims the US economy has shifted from a K-shaped recovery to a C-shaped one, suggesting a narrowing gap between high and low earners. However, economic analysts remain skeptical, noting that data does not yet support the conclusion that wealth inequality is significantly compressing.
Why it matters
The debate over economic shape influences federal policy decisions and public perception of wealth inequality in the United States.
The economy keeps getting called new letters. Javier Zayas Photography/Getty Images The shape of the economy, and which letter best describes it, has become a point of contention. Treasury Secretary Scott Bessent said the K shape is over, and the C shape is in. In a K-shaped economy, higher earners see their fortunes grow while lower earners experience the opposite. Is the economy still K-shaped ? The label came into vogue to describe an economy where the rich keep pulling ahead while the poor fall further behind. Recent comments from business executives and policymakers suggest that shape might be changing. Hilton CEO Christopher Nassetta said that sales growth is spreading beyond just luxury. And Treasury Secretary Scott Bessent said the economy is now C-shaped, with outcomes at either end of the wealth spectrum starting to converge.
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