Americans are living in 2 parallel economies

While the wealth divide has only widened over the last few years, early pandemic-era policies provided a brief reprieve. Expanded unemployment benefits, three rounds of stimulus checks, an eviction ban, and low interest rates helped some lower-wage workers get ahead.  All of these have now ended, however.

For lower income Americans, the days of the labor shortage — in which jobs were abundant and everyone was quitting for higher pay — are numbered. Job openings are ticking down, unemployment claims are ticking up, and inflation remains near record levels, wiping out much of their earnings gains.

In June, 61% of Americans were living paycheck to paycheck, per a LendingClub report, — a number that's ticked up in recent months as average savings have fallen. While most borrowers remain well-positioned to make payments, this is becoming much more challenging for lower-income households than those making more than $50,000 annually, per data from the New York Fed.

Wealthier Americans seem to be doing just fine. While inflation is a nuisance, many have enough savings built up to continue spending, and given the unemployment rate remains low, most can rely on a steady source of income. $S&P 500 Index (.SPX.US)$ $Nasdaq Composite Index (.IXIC.US)$ $Dow Jones Industrial Average (.DJI.US)$ $SPDR S&P 500 ETF (SPY.US)$ $Invesco QQQ Trust (QQQ.US)$