Americans earning under $100K are 'at or near' a recession

The US market (^DJI, ^GSPC, ^IXIC) gains despite worries about the health of the economy, which may translate to households with more investments feeling better about the economy than their uninvested or less invested peers.

B. Riley Wealth chief market strategist Art Hogan joins Opening Bid to discuss the current dynamics and how they perpetuate the idea of a K-shaped and bifurcated economy. Yahoo Finance Senior Reporters Brooke DiPalma and Ines Ferré provide additional context on the state of the market.

To watch more expert insights and analysis on the latest market action, check out more Opening Bid.

Video Transcript

00:00 Brian

Does the economy only work if you feel good about stocks? That's one of the lead stories in the Wall Street Journal today. That left me thinking. Consider this, gains in 30 top AI stocks alone have added $5 trillion dollars to household wealth across the country in the last year, according to a recent JP Morgan analysis. Federal Reserve data shows Americans gained more than $63 trillion in wealth from the first quarter of 2020 through the second quarter of 2025. Art,

00:23 Brian

we've been, you know, this is something that I've really been thinking a lot on of late, but really throughout the whole year.

00:32 Brian

We're seeing a great year for the stock market, but the average household, they're just, they don't seem to be participating in it.

00:38 Art

Yeah, I the reason for that Brian is it's a bifurcated ownership of equity. So 62% of Americans have ownership of US equities. But if you were to take that a step further and say, of those households that have more than $100,000, that number goes up to 84%. of those households that have uh uh income of less than $50,000, the number goes down to 22%. So it's very bifurcated and I think that's reflective of what we're seeing in the economy and consumers in general.

01:06 Art

In this K-shaped economy where the upper end, those that have more access to the the capital gains and and and the movements and markets are continuing to drive consumer spending. The lower end of that is certainly the other part of that K-shaped recovery that we're going through right now, just don't have that kind of flexibility and and don't have wages that are growing faster than inflation.

01:21 Brian

Art, you think that cohort is in a recession?

01:24 Art

That cohort is at or near recession. If you look at that cohort and break it down even further, the unemployment rates for most of that cohort are twice what the unemployment rate is for the country. So it's certainly that part of the uh the US economy that's hurt the most. And then there's obviously reasons for that and and uh but when you look at unemployment rates just alone, that cohort has a 2X the unemployment rate that the rest of the country has.

01:46 Brian

Brooke, Art brings up a really good point. We've seen it through the prism of some of the so many of these fast food results. Even Wendy's, I think reported last week, almost a 5% decline in same store sales in the US. Their international business is doing better than their US business.

01:58 Brooke

Brian, what we've seen is this true K-shaped economy play out across retail, across fast food, even coach tapping into Gen Z, while Gen Z can't seem to win over, uh or Cava can't seem to win over Gen Z. It's really this bifurcation that we're seeing across income cohorts, age groups, and really these companies trying to tap in to win big. For example, Wendy's might not have done well here in the US, but McDonald's brought back that extra value meal, that $5 and an $8 price point.

02:24 Brooke

And that's resonating with low-income consumers. And so, it's really about who's playing the best game here, who's leaning into value the most to gain these income cohorts that are clearly under pressure due to unemployment, higher rent, and also, don't forget we had the return of that student loan repayments kick off back in April, and that is really hurting Gen Z right now.

02:42 Brian

Inez, thank God for the rich, right?

02:46 Inez

I I mean, look, they're the ones that are spending, but definitely, if you hold assets, you did well uh this year. If you held stocks, if you held metals, if you held crypto, you did well. And if you didn't have money to put in the markets or if you put the money aside and and thought, well, I'll wait for a better time to go into the market, you basically shorted the market. I mean, that's that if an asset holder does well in this kind of environment. We've talked about the debasement trade before. We've talked, I I I I know I've repeated myself over the value of money that but people see it. They go to the store and they see that the prices are higher and that their dollar can buy less. And so the only way to get around it is to buy assets and to try and get ahead of that inflation.

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