BofA Data Shows 'E-Shaped' Consumer Economy Emerging

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A new analysis from Bank of America suggests the shape of the consumer economy is no longer a 'K,' as the spending power and wage growth of middle-income households is pulling away from lower-income consumers, though still lagging behind higher-income households. The data shows a widening gap between the fortunes of the wealthy and everyone else, with an 'E-shaped' economy emerging.

Why it matters

This shift in the consumer landscape has significant implications for businesses, policymakers, and the overall health of the economy. The growing divide between higher-income, middle-income, and lower-income consumers will require tailored strategies and interventions to address the unique needs and challenges facing each segment.

The details

BofA's internal data shows that in January 2026, spending growth for higher-income households on credit and debit cards was 2.5% year-over-year, while lower-income households grew just 0.3% and middle-income was relatively flat at 1%. A similar pattern emerged in after-tax wage growth, with the gap between higher- and middle-income households at its largest in nearly five years.

• In January 2026, the spending growth gap between higher-income and all other households was at its largest since mid-2022.
• The gap between higher-income and middle-income households' wage growth was at its largest in nearly five years as of January 2026.

What’s next

Businesses, policymakers, and economists will likely continue to monitor this evolving consumer landscape and adjust strategies accordingly to address the unique needs of higher-income, middle-income, and lower-income households.