The Seventeenfold Gap

While April 2026 consumer spending nominally grew 4.8%, this masks a stark 'K-shaped' divergence where high-income wage growth vastly outpaces cost-of-living increases while low-income households are squeezed by inflation.

Key Takeaways

• 1.Headline spending growth is misleading because it is heavily driven by price inflation (gas/oil/tariffs) rather than an increase in transaction volume.
• 2.A massive wage growth gap has emerged: high-income wages grew by 6.0% (top 5% by 10%) while low-income wages grew only 1.5%.
• 3.Real consumer spending growth is significantly lower than nominal growth; when adjusted for 3.8% CPI, spending growth was roughly 1%.

Table of Contents

• The first complication: it's prices, not purchases.
• Second: a narrower group is doing the spending.
• Third: the safety net is K-shaped too.
• What the number actually means.

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