Consumer Spending Habits Are Showing Signs of a K-Shaped Economy, but the Narrative Might Be Out of Steam

The “two-speed” economy makes for a great headline, but reality is messier. Luxury gyms, high-end hotels, and premium entertainment venues are booming while budget competitors struggle, fueling the idea that wealthy consumers are carrying spending. However, some economists argue the so-called K-shaped narrative may be running ahead of the data.

The split economy: The divide shows up clearly in leisure spending. Life TimeLTH

grew Q4 revenue 12.3% to $745.1M as affluent members absorbed $10 to $30 monthly price hikes, pushing average revenue per member to $882 on heavier spending for training, spa services, and premium food. Conversely, although Planet FitnessPLNT

added 1.1M members in 2025, IT spooked investors with softer 2026 guidance and rising cancellations, prompting warnings of what Stifel analyst Chris Cull calls a growing “credibility hurdle.” The pattern extends well beyond fitness centers into travel and entertainment:

• Luxury hotel chains saw revenue per available room rise 9% year-over-year, while economy-focused operators charging around $67 per night reported declines.
• Sphere EntertainmentSPHR
  shares have surged ~200% over the past year, while AMC EntertainmentAMC
  has fallen ~64% as budget entertainment struggles.

The Economist’s Counterargument

Not everyone’s convinced the divide is real. A Barclays research team warned in February 2026 that “the narrative of K-shaped growth appears to be exaggerated, downplaying risks of a fragile expansion.” Pantheon Macroeconomics noted the top 20% of households have accounted for ~40% of consumer spending for 25 years, a share that hasn’t changed despite soaring asset prices. Even more surprising, categories dominated by lower-income households grew the most above long-term trends last year.

• From 2019 to 2024, disposable income for the poorest households rose about 38%, the fastest of any group, with real income growth near 14%, just behind the wealthiest at 15%.
• Richmond Fed’s Tom Barkin warned of lower-income strain, but Boston Fed’s Susan Collins noted “those indicators don’t show as much of a difference across different income levels.”

Escaping the mirage: The K-shaped economy makes for a compelling story — and it’s certainly visible in pockets like premium fitness and luxury hospitality. But if economists are right that spending shares have remained stable and income gains resemble more of a U-shape than a K, then Wall Street and CEOs may be misreading the risks ahead. The real danger isn’t that the rich are carrying the economy — it may just be that everyone’s priced in a story that unravels the moment spending weakens across the board.