Inequality in the U.S. expanded during June, as measured by the Morning Consult/Axios Inequality Index, which ticked up to 6.71 from 6.53 in May.
Why it matters: The latest data show that middle-income Americans have a significantly improving employment outlook and feel more secure in their jobs than groups of lower-income and higher-income adults.
- "If you’re back to working at a restaurant or bar, your economic experiences and expectations are a lot better than they were last month. Everyone else is stuck in the mud," John Leer, Morning Consult chief economist, tells Axios.
How it works: The Morning Consult/Axios Inequality Index measures whether or not economic inequality is rising or declining — as opposed to providing a snapshot of the distribution of income or wealth. A higher reading means more inequality.
- The index’s movement is based on comparing the sentiment of three income groups — $50,000/year or lower; $50,000-$100,000/year; and $100,000/year-plus.
The overall index is made of four components.
- Pay income loss inequality was relatively stable in June versus May.
- Consumer sentiment tracks differences in consumer confidence between the three income groups. Inequality here continually moved up between May 2020 and March 2021 but has been on a downward trend since then. June’s reading was nearly in line with May’s.
- Job loss expectations had the biggest movement overall this month. The inequality here increased, following an uptick last month. Individuals in the high-income and low-income segments were much more concerned than the middle-income segment.
- Financial vulnerability tracks the share of Americans who say they can’t cover basic expenses for a month with their savings. This measure actually fell slightly from May to June, after increasing during the previous monthly period.
The bottom line: The hand-off between stimulus checks unwinding and additional jobs coming online has gone the smoothest for the middle-income group. But the data implies that in the lower-income group, people are using up stimulus checks at a faster rate than they're finding employment, Leer says.