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K-shaped spending trends might be reversing — or they're just in hibernation
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Are K-shaped spending patterns on their way out?
But Bank of America economists wrote in a recent report that, excluding gasoline, annual growth in lower-income household spending has now outpaced higher-income household growth for two weeks, countering the K-shaped trend.
"This is a reversal of the K-shaped spending dynamics that have characterized consumer spending for over a year," Bank of America economist Aditya Bhave wrote in a note Tuesday.
Spending on discretionary, nonessential goods is also outpacing spending on staples across most income categories, a sign of consumers' confidence.
Low-income consumers are especially sensitive to inflation, and rising gas prices could force them to cut spending on everything else.