# Is the K-Shaped Economy Over? What the Data Says Scott Bessent claims the K-shaped economy has ended, but the data doesn't support this view. - **Source:** [Fortune](https://fortune.com) - **Published:** 2026-08-05 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/918904d3-f97e-48eb-82cd-b28930b91822 ## What is the K-Shaped Economy? The K-shaped economy refers to a situation where high-income individuals thrive economically while low-income individuals fall behind. Scott Bessent claims this situation has ended and the economy has transitioned to a C-shape. However, data does not support this claim. Income inequality persists, and high-income individuals remain in a better economic position. ## Bessent's Claims Scott Bessent stated in a CNBC interview that the K-shaped economy has ended and the economy has transitioned to a C-shape. Bessent mentioned that the bottom 25% of earners saw a 2% real wage increase. He also claimed that policies like the One Big Beautiful Bill Act positively impacted household finances. However, these claims are not yet supported by data. ## One Big Beautiful Bill Act The One Big Beautiful Bill Act was described by the White House as the biggest tax break in history. This law provides an average 15% tax cut for Americans earning between $15,000 and $80,000. It also promises to increase tipped and overtime workers' annual take-home pay by $1,500. However, institutions like Goldman Sachs and Morgan Stanley argue that the Iran war's impact on gas prices has nearly canceled out these promised benefits. ## Income Distribution Data According to Federal Reserve data, in the first quarter of 2026, the bottom 25% of earners saw a 3.6% wage increase, while the top 25% saw a 3.9% increase. These figures indicate the K-shaped economy persists. Atlanta Fed data also shows the bottom percentile's wage growth never exceeded the top percentile's. ## Wealth Gains Distribution RSM chief economist Joe Brusuelas noted that 75 cents of every dollar generated by the equity rally flows to the top 20% of earners. This shows wealth gains are concentrated among high-income individuals. BNP Paribas' market team also stated equity holdings are concentrated among higher-income individuals, deepening the K-shape. ## Consumer Spending Moody's chief economist Mark Zandi cited Fed data showing that spending by individuals earning $200,000 or more grew by 6.5% in the first quarter of 2026, a nearly 4% real increase. Meanwhile, spending by the bottom 80% remained unchanged after inflation. These figures highlight spending inequality. ## Economic Indicators Bank of America observed some K-shaped economy elements beginning to close. U.S. chief economist Aditya Bhave noted consumer spending (excluding gas) is no longer K-shaped on a year-over-year basis. Three factors contribute to this trend: stronger job growth, lower tax withholding, and June's drop in gas prices. ## Conclusion Scott Bessent's claim that the K-shaped economy has ended is not yet supported by data. Income and wealth inequality persist, and high-income individuals remain economically better off. Economic indicators like equity rallies and consumer spending show the K-shaped economy continues. More data is needed to support Bessent's claims. ## Sources covering this story - https://fortune.com/2026/08/05/scott-bessent-is-sick-of-hearing-about-the-k-shaped-economy-and-declares-its-overbut-the-data-would-beg-to-disagree/ — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._