U.S. Economy and Inequality

New figures from the Federal Reserve Bank of New York, released Tuesday, show that since 2023 U.S. households earning $125,000 or more have increased their inflation‑adjusted goods spending by 2.3%, compared with 1.6% for middle‑income households and just 0.9% for those earning under $40,000. The dataset, part of the New York Fed’s "economic heterogeneity" indicators, also finds that in the last three months of 2025 lower‑income and rural households faced higher inflation than wealthier families, because a bigger share of their budgets goes to items like housing, groceries and utilities that saw some of the steepest price increases after the pandemic. The figures cover non‑auto goods and likely understate the full gap, since they don’t capture upper‑income spending on travel, dining and entertainment. Economists say the data bolster the picture of a "K‑shaped" recovery in which higher‑income, college‑educated Americans are sustaining much of the consumption driving GDP, while lower‑income households are treading water or falling behind in real terms. The unequal spending rebound helps explain why many Americans report pessimism about the economy despite aggregate growth and feeds into political debates over inflation, interest‑rate policy and targeted relief.