Bloomberg Surveillance · Thursday, July 23, 2026
Julia Coronado describes a 'K-shaped' consumer economy where high-income households, benefiting from strong net worth, are driving spending. The median household, despite having a job and seeing wage increases, feels the pinch of inflation, leading to cautious sentiment but not significant retrenchment.
“So the consumer is a mixed bag. You know, we talk all the time at nauseum about the K shaped economy, but it is a reality. So you know, for say the median or average household, they've got a job, they may not be feeling great about it. Consumer sentiment around the labor market is pretty pretty low. But they have a job, they're earning income. They may be seeing some slippage and purchasing power from inflation, but they're not rolling over and retrenching and really tightening up their budgets.”
“Meanwhile, you still have high income households feeling pretty good after years of a very bullish stock market has left their net worth you know, pretty close to all time highs. So the upper income consumer is powering more of the spending. They always power a large share, but it's certainly more than than usual.”
“And the middle to low income consumer isn't feeling good, but they're hanging in enough to keep the economy on track. So it's not a raw, raw economy by any stretch for most people, but it's okay. It's getting by one sign.”