Bessent says economy no longer K-shaped

Bessent says the K-shaped economy is ‘over’

Jake Bessent, chief executive of Elliott Investment Management, declared on Tuesday that the K-shaped economy — where wealth and income growth diverge sharply between high- and low-income groups — is finished. Speaking at the Sohn Conference in New York, Bessent argued that the post-pandemic economic rebound has broadened prosperity, pulling more Americans into shared growth.

The K-shaped recovery became a defining feature of the early 2020s, fueled by stimulus checks, remote work booms, and surging asset prices that benefited professionals with college degrees and digital skills. Meanwhile, service workers, gig employees, and those in struggling industries lagged behind, widening inequality. Bessent’s claim suggests a shift: hiring surges in sectors like manufacturing, logistics, and hospitality are pulling lower-wage workers into full-time roles with rising pay.

He pointed to strong job creation across income tiers, wage growth for frontline workers, and a decline in long-term unemployment as signs the divide is closing. Data from the Bureau of Labor Statistics shows average hourly earnings for production and nonsupervisory workers rose 4.1% over the past year, outpacing overall inflation. Retail and leisure paychecks are rising faster than tech salaries for the first time since the pandemic began.

If Bessent is right, the economy may be entering a more inclusive phase — one where benefits flow to a broader base. But skeptics warn that structural issues like automation, housing costs, and wage stagnation in certain regions could still leave many behind. The Federal Reserve’s push to cool inflation without triggering job losses will be key. Either way, Bessent’s remarks signal a rare glimmer of optimism in a post-pandemic economy long criticized for its uneven gains.