The K-shaped economic divide might be narrowing

According to Axios, there's fresh evidence that America's so-called K-shaped economy may be starting to close, at least on wages. The Bank of America Institute, drawing on anonymized deposit-account data, estimates after-tax wage growth for lower-income households accelerated to four point one percent in June, up from two point nine percent in May. That's just shy of the four point two percent seen by higher earners, and above the three point four percent for middle-income households — the narrowest gap in years. Spending is converging too: PNC says the divide between lower- and higher-income households is the smallest in three years. Bank of America credits stronger hiring and job-switching among lower-paid workers, though it cautions part of the jump could be mechanical, if workers adjusted tax withholdings under the One Big, Beautiful Bill Act. The catch: the K hasn't vanished. Stock gains and home equity still flow overwhelmingly to affluent households, so lower-income workers haven't felt the same wealth boom.

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