US households become increasingly strained in diverging economy

HYATTSVILLE, UNITED STATES, FEB 5 (AFP/APP/DNA):Around the crack of dawn, a line begins forming at a strip mall in Hyattsville, Maryland, as residents ranging from students to delivery workers and federal contractors wait to sign up for food assistance.

“Right now, it’s a lot — paying rent, buying food,” said Shirleyann Desormeaux, a chef supporting four children in her household.

Even with two incomes, “it’s still not enough,” the 58-year-old added.

She said she was keen to work, but has experienced having her hours cut as businesses struggle too.

Desormeaux was among 100 or so people turning up in near-freezing temperatures in Hyattsville, a suburb of the US capital Washington, to seek groceries for their families, as anxiety about living costs rises in the world’s biggest economy.

Although US economic growth has been solid, with President Donald Trump’s administration touting Wall Street records and tax relief, analysts warn that a “K-shaped economy” has taken hold.

This is a situation where wealthier households benefit from rising asset values, but median- and lower-income families increasingly struggle.

Nearly 60 percent of consumer spending in the third quarter last year came from the top 20 percent of income earners, according to Mark Zandi of Moody’s Analytics.

In the greater Washington area, some 36 percent of households experienced food insecurity in the past year, according to the Capital Area Food Bank.

“We’re seeing more individuals in what we would traditionally consider higher-income quartiles,” said Radha Muthiah, the food bank’s CEO.

That means a family of four making $90,000 to $120,000 a year could find themselves in need of “extra assistance in putting food on the table,” she told AFP.

A key reason is “prolonged, sustained levels of inflation” after the Covid-19 pandemic, with wage growth not keeping pace, Muthiah said.

“People are suffering,” Desormeaux said.