Moody's Analytics chief economist Mark Zandi has warned that America's stark economic divergence remains "firmly intact," as newly updated data reveal a bruising financial reality in which the bottom 80% of earners are losing the battle against inflation, while top earners dominate national consumption.
The Spending Divide Deepens According to Zandi's updated estimates, households in the top 20% of the income distribution—defined as those earning over $175k annually—now account for an "astounding nearly 60% of outlays." Driven by a robust 6.5% surge in personal spending over the past year, this affluent segment is single-handedly "driving spending and the economy" well ahead of the current 2.7% CPI inflation rate.
Meanwhile, outlays for the bottom 80% of Americans grew at just 2.6%, meaning the vast majority of consumers "fell short of inflation." Zandi noted this data presents an "overwhelming case" that the financial system is becoming "increasingly" unequal, leaving "most Americans… upset with their financial situations." The K-shaped economy remains firmly intact.
That’s according to our updated estimate of personal outlays by income group for 2026q1, based on the Fed’s Financial Accounts and Survey of Consumer Finance.
