Bank of America Reports Convergence in U.S. Consumer Spending, but K-Shaped Economy Persists

Bank of America's latest consumer data shows a 'great convergence' in household spending across lower-, middle-, and higher-income households, with discretionary spending growing at nearly the same rate for all groups. However, the top 5% continue to spend at a faster pace due to strong stock market performance. The convergence is particularly significant in discretionary categories, but the underlying wealth divide remains intact. After-tax wage growth for lower-income households has accelerated toward 5%, aligning with spending growth. This shift could indicate a strengthening bottom of the K-shaped economy, although it's unclear whether this is due to job switching or temporary tax withholding adjustments.