Edward Conard

Top Ten New York Times Bestselling Author

  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
Upside of Inequality Oxford Unintended Consequences

AI Summary. Available spending data does not support the narrative of a bifurcated "K-shaped" consumer economy: surveys show households earning under $50,000 reported spending growth of 5%, versus 4.6% for those earning over $100,000. Government data show the top income decile's share of aggregate spending at 22.8%, down from 23.4% a year earlier.

Ernie Tedeschi Stripe Economics
Date Posted:
Is Database:
Database

Using internal Stripe payment data, Tedeschi finds that spending growth of households in low-income zip codes has outpaced that of households in high-income zip codes since 2023, thus showing no evidence of the “K-shaped economy” in the consumer sector.

Does spending data support a bifurcated consumer economy?

Core argument: Households making under $50,000 reported spending growth of 5% over 2025, versus 4.6% for households making over $100,000, which does not support a K-shaped bifurcation narrative.

While consumer spending by income group is not tracked well in real time by any single government source, the available data does not support a bifurcation narrative. Multiple spending surveys show low-income household spending [growth] performing at least on par with high-income households over 2025. Households making under $50,000 reported spending growth of 5% over 2025, versus 4.6% for households making over $100,000. While inflation-adjusted retail spending for lower-income households grew modestly slower than it did for top-income households in 2023 and 2024, the gap converged through 2025—low- and upper-income consumption grew at similar rates. This is consistent with lagged but larger and more-reliable government data, which shows the top income decile’s share of aggregate spending at 22.8% in 2024, down from 23.4% in 2023 and below the recent peak of 23.9% in 2016, Using Stripe data, we can also crudely proxy for consumer spending by income quartile, based on consumer [Merchant Category Codes] transactions and average income in the ZIP code of the spender. This data similarly shows no evidence of a high-income divergence: if high-income ZIP codes were seeing faster spending growth than low-income ZIPs, the ratio of the two would be rising. But in fact, the ratio has been falling since 2023. So at least on Stripe, lower-income ZIP codes have seen more robust spending growth than the top.

Takeaways by Macro Roundup® AI

  1. Households making under $50,000 reported spending growth of 5% over 2025, versus 4.6% for households making over $100,000, which does not support a K-shaped bifurcation narrative.
  2. The top income decile's share of aggregate spending fell to 22.8% in 2024 from 23.4% in 2023, below the recent peak of 23.9% in 2016, according to lagged government data.
  3. Stripe transaction data proxied by ZIP-code average income shows the ratio of high-income to low-income ZIP spending falling since 2023, with lower-income ZIP codes seeing more robust spending growth.

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