- One part of America is enjoying the soaring stock market and booming home sales. Another part is worrying about getting evicted and finding work. Welcome to the K-shaped recovery.
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New home sales soared 13.9% in July to their highest level since December 2006, the U.S. Census Bureau announced yesterday. Also yesterday, the Conference Board announced that U.S. consumer confidence had reached a six-year low in August.
How can both statistics be true? Welcome to the K-Shaped Recovery.
Professionals who continue to work from home and see their portfolios perform well in the record-breaking stock market have more or less recovered from the COVID-19 pandemic. They are seeing their fortunes rise, like the top half of the “K,” while everyone else worries they are falling further behind, like the bottom half of the “K.”
This phenomenon explains why new home sales were up 36.3% in July and the median sales price climbed to $330,600, up 7.2% compared to the previous year, while 40 million could lose their homes now that the moratorium on evictions has been lifted in many parts of the country.
“The middle class has essentially been left out of the stock market surge,” Edward Wolff, an economics professor at New York University, told the Wall Street Journal. “The rich have taken off from the rest of society. They have become an enclave unto themselves.”
Impact investors talk of the rebuilding effort as “The Great Reset” — a chance to alter policies and set guidelines to make the recovery more equitable. Until that takes hold, though, those halves of the “K” will continue to move in different directions.
In Other News: Blue Bonds, H-1B Visas, Murder Hornets
The Biden plan to make 401(k) tax breaks more equitable already has opposition. American Airlines plans to furlough 19,000 workers in October. The wave of “blue bonds” to help fisheries. American tech companies need software engineers so badly they offer some H-1B visa holders $2 million salaries. Why we actively avoid information that can help us. KFC is no longer “finger lickin’ good.” Murder hornets really do sound terrifying.
Enjoy this photo gallery of beloved mail carriers and, well, Newman.