K-shaped spending trends might be reversing — or they're just in hibernation

July 28, 2026 - 21:02

Recent data from Bank of America suggests the long-running K-shaped spending divide between rich and poor households may be starting to narrow. In a report released this week, the bank's economists noted that, when excluding gasoline purchases, lower-income households have posted faster annual spending growth than their higher-income counterparts for two consecutive weeks. This marks a potential reversal of the K-shaped trend, where affluent consumers continued to spend freely while lower-income groups pulled back sharply.

However, analysts warn that the shift could be temporary. The data might reflect seasonal adjustments or a temporary "hibernation" of the K-shaped pattern rather than a lasting change. Higher-income households may simply be pausing discretionary spending after a prolonged period of strong consumption, while lower-income families are catching up on essentials. Without sustained momentum across several more weeks, it remains unclear whether the gap is truly closing or just resting before widening again. The report underscores how fragile the consumer landscape remains, with inflation and interest rates still pressuring budget-conscious shoppers.