Moody’s Analytics chief economist Mark Zandi has warned that America’s stark economic divergence remains “firmly intact,” as newly updated data reveal a bruising financial reality in which the bottom 80% of earners are losing the battle against inflation, while top earners dominate national consumption.
The Spending Divide Deepens
According to Zandi’s updated estimates, households in the top 20% of the income distribution—defined as those earning over $175k annually—now account for an “astounding nearly 60% of outlays.”
Driven by a robust 6.5% surge in personal spending over the past year, this affluent segment is single-handedly “driving spending and the economy” well ahead of the current 2.7% CPI inflation rate. Meanwhile, outlays for the bottom 80% of Americans grew at just 2.6%, meaning the vast majority of consumers “fell short of inflation.”
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Zandi noted this data presents an “overwhelming case” that the financial system is becoming “increasingly” unequal, leaving “most Americans… upset with their financial situations.”
The K-shaped economy remains firmly intact. That’s according to our updated estimate of personal outlays by income group for 2026q1, based on the Fed’s Financial Accounts and Survey of Consumer Finance. Americans in the top 20% of the income distribution (those who earn over… pic.twitter.com/VxoxtbYG3a
— Mark Zandi (@Markzandi) June 21, 2026
A ‘Lopsided’ Economic Background
This economic data underscores a widening political rift over wealth distribution. Rep. Ro Khanna (D-CA) recently amplified these frustrations, sharply slamming elite defenses of what he described as an “unfair and lopsided economy.”
Khanna highlighted a grim milestone tied directly to these financial pressures, noting that “nearly 80 percent of Americans believe the American dream is dead” while billionaires hold outsized historical wealth.
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Khanna called for an urgent shift toward “patriotic capitalism, instead of an extractive capitalism” to protect the foundational working class. He pointed out that while the capital class builds fortunes, essential workers like nurses, teachers, and firefighters “can’t afford to even buy a house.”
Khanna warned that an entire younger generation now feels “forsaken” by an uneven system where a billionaire’s influence skews public laws, leaving the bottom 80% squeezed out.
This is just intellectual nonsense @friedberg and wouldn’t get a passing grade at a place like University Chicago in a freshman seminar. You know that.
I can’t believe you are defending without a shred of introspection the unfair and lopsided economy where nearly 80 percent of… https://t.co/p8PcGMcRaY
— Ro Khanna (@RoKhanna) June 21, 2026
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How Have Markets Performed In 2026?
The S&P 500 index has advanced 9.36% year-to-date. Similarly, the Nasdaq Composite index was up 14.13%, and the Dow Jones gained 6.58% YTD.
The SPDR S&P 500 ETF Trust and Invesco QQQ Trust ETF , which track the S&P 500 and Nasdaq 100, respectively, closed higher on Thursday. The SPY ended up 1.04% at $746.74, while the QQQ advanced by 2.51% to $740,62.
Meanwhile, Dow tracker, State Street SPDR Dow Jones Industrial Average ETF Trust, closed 0.12% higher on Thursday.
Photo courtesy: Shutterstock
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