Accessibility helpSkip to navigationSkip to main contentSkip to footer Stay ahead with the FT. Get trusted FT Journalism for a discounted price. America remains a very unequal place, but on many metrics inequality is not increasing For the richest, wealth increases have been driven by investments, while for the less affluent the dominant appreciating asset is the home, meaning higher interest rates could see the wealth gap begin to widen again© Allen J.
Schaben/Los Angeles Times/Getty Images Your guide to what Trump’s second term means for Washington, business and the world No idea has left a deeper mark on public conversations about markets and the economy in recent years than the “K-shaped economy”, a concept coined in late 2020. The notion is that since the pandemic shutdown the economy in aggregate has recovered strongly, but that conceals a deep rift. The top arm of the K — the richest top 10 per cent of families, say — is prospering tremendously, while the bottom half of the distribution languishes, punished by inflation without participating, as the rich have, in the boom in financial assets.
This idea has been used to explain everything from resilient consumer spending to corporate earnings surprises (good and bad), to our vexed political life. But there is not much timely data on the distribution of income and wealth, so K-explanations (or the rejection of them) have been more a reflection of the preconceptions of the explainer than a meaningful contribution to our understanding. Last week, however, new data came in: the 2025 edition of the Federal Reserve’s triennial Survey of Consumer Finances.
The SCF gives a multi-dimensional look at Americans’ households by income and wealth cohort, as well as by education, age, race and so on. A crucial takeaway: while the US remains a very unequal place, it has not been getting much more unequal. On most metrics, inequality has hardly increased since the pandemic, and on some it has fallen.
For much of the past 30 years, the top 10 per cent of earners have seen a faster increase than the rest of the distribution. Their median income today, at $400,000, is five times that of families in the middle of the distribution. In 1989, when the study began, the multiple was four.
Mean incomes (a measure influenced more by the very richest) follow a similar but more extreme pattern, with the top earning eight times what the middle does. But whether you look at medians or means, since 2019, income growth has been the same or slower at the top than at the bottom. And the authors note that in the past three years: “Families in the lower ends of the income and net worth distributions saw modest increases in median and mean income, while families in the upper ends saw declines.” Wealth — measured by net worth — is a more important metric, and here the survey tells a subtle but no less surprising story.
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