Marketplace Morning Report

Episode: In case you forgot, this is a K-shaped economy
Date: December 8, 2025
Host: David Brancaccio

Overview

This episode centers on the growing divide in the U.S. economy—described as a "K-shaped economy"—where upper-income Americans are prospering while lower- and middle-income households are struggling. In under ten minutes, host David Brancaccio explores this dynamic by discussing recent economic assessments, examining consumer behaviors in dining, and touching on relevant market headlines.

Key Discussion Points & Insights

1. State of the Economy: Two Diverging Realities

Guest: Julia Coronado, Economist, Founder of Macro Policy Perspectives

• Big Bank CEO Perspective (Jamie Dimon, JP Morgan Chase):

  • Short-term outlook optimistic: American consumers are “doing fine,” companies profitable, stock markets robust.
  • Small negatives noted: Slight weakening in job market and persistent inflation.
  • Quote:

    “In the short run, it looks like the American consumer is doing fine, is chugging along, companies are making profits, stock markets are high, and that could easily continue. There are a little small negatives, you know, like jobs are weakening, but just a little bit. Inflation is there and maybe not going down.”
    — Jamie Dimon [01:29]

• Economist’s Perspective:

  • Economists are more concerned, especially about the labor market:
    • Noted private and public sector job losses.
    • Unemployment rate is rising.
    • Anticipation that the Federal Reserve will lower interest rates soon due to these concerns.
  • Fed’s Dilemma: Inflation remains "sticky" and above its 2% target—posing problems particularly for lower- and middle-income Americans.
  • K-shaped Economy Explained:
    • High-income groups are weathering inflation, benefiting from a buoyant stock market.
    • Lower- and middle-income households are being hurt by persistent high inflation.
  • Quote:

    "There's something we call the K-shaped economy where high income Americans who can, you know, have buffers of savings are doing fine and feeling the tailwind of the stock market. But the middle and lower income consumers are the ones who really get pinched by this sort of stubbornly high inflation.”
    — Julia Coronado [02:29]

2. Federal Reserve & Rate Cuts

• The Fed is expected to cut interest rates by a quarter-point.
• No clear guidance for 2026; further cuts depend on whether the economy shows resilience or continued weakness.
  • Quote:

    "Whether they will cut interest rates more or not at all depends on whether the economy is as resilient as Jamie Dimon expects or it's a little bit weaker and they need to cut more."
    — Julia Coronado [03:10]

• Kevin Hassett (Director, National Economic Council, and Fed chair contender):
  • Emphasized the importance of waiting for reliable data (noting gaps from recent government shutdowns).
  • Quote:

    “The Fed chair's job is to watch the data and to adjust.”
    — Kevin Hassett [03:50]

3. Market Headlines: Entertainment Industry Shake-Up

• Netflix & Warner Brothers Discovery:
  • Netflix was initially set to acquire Warner Brothers Discovery.
  • Rival Paramount launches a hostile $108 billion bid (30% higher than Netflix’s), with possible antitrust implications in the air.
  • Political links noted: Ellison family's ownership of Skydance/Paramount and ties to Trump, who commented on scrutiny for the Netflix deal.

4. The K-Shaped Economy in Daily Life: Eating Out as a Lens

Guest: Robert Byrne, Director, Consumer and Industry Insights at Technomic

• Dining Frequency Data:

  • Households earning under $50k: Weekly restaurant use dropped from 63% (2019) to 58% (2025).
  • Six-figure income households: Steady at 80% weekly restaurant use.
  • Quote:

    “Households under $50,000 annual income from 2019 to where we are today, in 2025 that number has dropped from about 63% who use restaurants weekly down to about 58%. If you go on to the other side of the scale ... that number's been even at 80%.”
    — Robert Byrne [06:50]

• Fast Food & Value Menus:

  • Value menu items can help somewhat, but overall rising menu prices hurt families’ ability to dine out.
  • Restaurants are considered a “luxury” for many; consumers either seek unique experiences or simply cut back.
  • Quote:

    “The unfortunate truth for restaurants is they still remain a bit of a luxury for consumers … If restaurants just are presenting a cheaper option as opposed to a more enticing option, well, it just becomes less appealing.”
    — Robert Byrne [07:29]

• Fine Dining vs. Mid-Tier Restaurants:

  • High-income consumers keep upscale restaurants in business—demand remains, especially for special occasions.
  • "Impact spending": Younger diners skip frequent casual meals, save up for more special, higher-impact restaurant occasions.
  • Pandemic’s lingering effects: Many independent restaurants struggle or close, but high-end spots see continued patronage.

Notable Quotes & Memorable Moments

• “Economists tend to worry a little bit more maybe than bank CEOs.”
  — Julia Coronado [01:53]
• “It's incredibly difficult…restaurants just are presenting a cheaper option as opposed to a more enticing option, well, it just becomes less appealing.”
  — Robert Byrne [07:29]
• “Younger diners are doing what we like to call impact spending ... we’re now seeing them sort of save up for that impact occasion.”
  — Robert Byrne [08:18]

Key Segment Timestamps

• [01:17] Jamie Dimon’s assessment of the U.S. economy
• [01:53] Julia Coronado responds; worries over labor market and inflation
• [03:10] Discussion of expected Fed rate cut
• [03:36] Kevin Hassett on the importance of economic data for Fed decisions
• [04:05] Headlines: Paramount’s bid for Warner Brothers Discovery
• [06:09] Robert Byrne on dining habits and economic divides by income

Conclusion

This episode paints a vivid picture of the ongoing economic split in America. While the wealthy benefit from strong markets and remain insulated from financial shocks, millions face increasing hardship from inflation and job instability. Even everyday choices like eating out reveal starkly diverging realities—illustrating what it means to live in a K-shaped economy in 2025.