K-Shaped Economy Persists as Goldman’s Consumer Dashboard Highlights Widening Gap

Growing Economic Divide: The K-Shaped Economy

Individuals with higher incomes and significant assets have seen their fortunes increase, thanks in part to soaring stock prices driven by the artificial intelligence boom and resilient real estate values. In contrast, those in lower and middle income brackets—particularly people without investments or property—are grappling with persistent inflation, modest wage increases, and high interest rates. This has led to an expanding gap within the consumer sector, a trend economists refer to as a "K-shaped economy."

Goldman Sachs remains optimistic about consumer prospects for 2026. Bonnie Herzog, the firm's managing director and senior consumer analyst, recently advised clients that now may be an opportune moment to invest in nicotine and related sectors.