Yahoo Finance | Fri, May 1, 2026 at 8:22 AM PDT

Higher-income Americans have driven retail spending growth in recent years, speeding past their low- and middle-income counterparts, according to new research from the New York Fed.

That so-called K-shaped spending pattern — a divergence in behavior between the well-off and those earning less — wasn't happening before the pandemic or immediately during its recovery. Instead, the New York Fed, which defined high-income households as those earning more than $125,000 annually, found that the trend took hold in 2023 after COVID-era subsidies and benefits for lower- and middle-income households faded out, with "only the high-income group consistently" showing "real spending growth over this period."

For everyone else, spending failed to keep up.

The analysis adds to a growing body of work from economists highlighting a country split into haves and have-nots, with evidence of a divide emerging across credit scores, spending, and pay.

"Reliance on a single segment of the economy has important implications for spending growth and its fragility, as well as for economic vulnerability and policy," the New York Fed researchers said.

The researchers also found that wealth has accumulated the most for high-income households since 2023. Meanwhile, lower-income households have been hit the hardest by inflation. And though the lowest-earning Americans experienced higher wage growth in parts of 2023 and 2024 relative to other income groups, they've since experienced the worst wage growth in the past year.

"Like retail spending, real net worth has displayed a K-shaped pattern since 2023, with higher income groups experiencing higher cumulative wealth growth," the researchers wrote. They added that the increase was fueled by "large increases in financial assets for higher-income groups" — in other words, stocks have been on a tear the past three years — which "raises questions" about whether their spending would be vulnerable in a stock market correction.

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