Remember back in 2020 when everyone was talking about a K-shaped economic recovery? White-collar workers who could do their jobs from home stayed employed, while lower-income service workers got laid off by the millions with uncertain prospects. Over time, a mix of fiscal relief, vaccines and other adaptive measures led to a strong rebound and helped close that gap.
Until now. Stagflationary trends in the housing market combined with the energy shock stemming from war in Ukraine has created a new kind of K-shaped economy. Homeowners, who tend to be wealthier to start with, are benefiting from surging home values. They also spend a proportionately smaller part of their incomes on food and energy, insulating them from inflationary shocks.
