K-shaped economy

Discussion is focused on how US consumer spending is diverging along a K-shaped economy, where higher-income households continue to spend strongly while lower-income households pull back under pressure from prices and borrowing costs. PwC has published analysis examining this split and what it means for retailers and the wider economy heading into the year.

Economist Mohamed El-Erian says the 'K-shaped economy' will be an increasingly important topic. The term describes diverging trajectories in which some sectors and households keep growing while others stagnate or decline. Writing for CNBC, El-Erian argues the split is becoming more pronounced, with policymakers and markets likely to focus more on these widening disparities in the period ahead.