Market Matters: The Myth of the Prosperous Worker

Plus three market trends to know about this week.

There’s a new storyline in the financial press: The K-shaped economy is morphing into something better.

Bank of America got some attention recently with research suggesting the gap between economy’s upper K—the shareholder class— and the lower K—working-class Americans—is narrowing. BofA cites credit card data showing that spending during the last few months has been rising faster among lower-income Americans than among higher-income shoppers. Larger refunds from last year’s tax-cut law might be one reason. People who change jobs are also getting bigger pay raises than they typically do.

The bank calls this “the great convergence,” a theme the media, always looking for a fresh storyline, is dutifully picking up. Axios, for instance, recently announced the “closing” of the K-shaped gap. Treasury Secretary Scott Bessent, eager for any good news that might offset the dreary and never-ending Iran war, went a step further, declaring that the K-shaped economy is “over.”

Sorry. Not buying it.