U.S. Treasury chief says K-shaped gap ending, data mixed

U.S. Treasury Secretary Scott Bessent declared this week that the country's "K-shaped" economic divergence, where higher-income households pull ahead while lower-income workers fall behind, is now over, asserting that lower-paid workers are seeing faster wage growth. His claim, made during multiple public appearances, was met with immediate scrutiny from independent economists and broader economic data which indicate a more complex and uneven picture.

In an interview with CNBC and in subsequent public statements on August 6, Bessent said he was "sick of hearing about this K-shaped economy" and stated definitively that it had ended. He argued the economy is becoming "C-shaped," with lower-income workers catching up. Citing government data, he highlighted that workers at the 25th earnings percentile saw year-over-year wage growth of 5.5% in the most recent quarter, outpacing growth for those at the 75th percentile. He also noted median weekly earnings rose 4.6%, surpassing inflation, and framed this as a stark reversal from losses of purchasing power during the prior administration. Bessent also credited tax policies under the "One Big Beautiful Bill Act," including tax breaks on...