Disparity between high- and low-income earners’ views of economy is shocking
Americans Divided on Economic Outlook Based on Income Levels
Shoppers browse through fresh produce at Frank’s Quality Produce Co. at Pike Place Market in Seattle, Washington, US, on Wednesday, May 28, 2025.
Income disparities are playing a significant role in shaping Americans’ views of the economy, recent data reveals. According to JPMorgan’s Cost of Living Survey, higher-income individuals are more likely to express confidence in the economic outlook for the next year compared to their lower-income counterparts.
The concept of a “K-shaped” economy, where economic experiences diverge based on income levels, is becoming increasingly evident in the current economic landscape. This phenomenon helps explain why affluent Americans continue to spend while lower earners struggle to cope with rising inflationary pressures.
“Survey results highlighted a clear divergence,” noted Matthew Boss, a prominent consumer analyst at JPMorgan, in a recent client note.
High-income respondents, on average, rated their economic confidence at 6.2 out of 10, with more than half of them selecting a score between 7 and 10. In contrast, low-income consumers had an average confidence rating of 4.4, with less than a quarter choosing a score in the higher range. This 30-point gap underscores the stark contrast in economic sentiment between these two groups.
When it comes to covering monthly bills compared to six to 12 months ago, nearly 60% of high-income individuals reported that it was easier or becoming easier. However, only 37% and 30% of middle- and lower-income groups, respectively, shared the same sentiment.
Furthermore, higher-income respondents were more inclined to increase spending on nonessential items in the coming year compared to other income brackets, as indicated by JPMorgan’s survey findings.
Notably, the University of Michigan’s monthly consumer survey also highlights a significant disparity in consumer sentiment between income classes. Over the past two years, the top third of earners have consistently reported a consumer sentiment rating approximately 25% higher than the lowest third.
The latest results from the University of Michigan survey, based on interviews conducted from July 29 to August 25 with a statistically representative sample of about 1,000 American households, further underline the economic divide based on income levels.
