While wealthy Americans spend, those with less are struggling

By the time the Pilsen Food Pantry opened on a recent morning, Mr Ulysses Moreno had been there for two hours - with a line of people behind him that snaked around the corner.

- Ben Casselman and Colby Smith

People outside Pilsen Food Pantry in Chicago. The divide between rich and poor in the US has become more pronounced. Slower wage growth and inflation are straining many families' finances.

(PHOTO: AKILAH TOWNSEND/ NYTIMES)

"This is a lifeline for me," said Mr Moreno, 39. He had lost his construction job a few days earlier, and with three teenagers at home, he wanted to make sure he could stock up. "Our food budget doesn't stretch as far as it used to."

A short distance away, on Chicago's Magnificent Mile, luxury hotels are bustling. Jewellery stores and designer boutiques do brisk business. Restaurants are packed with diners sipping US$20 (S$26) cocktails as they wait for tables.

To Dr Evelyn Figueroa, a family physician who founded and runs the Pilsen pantry, the dichotomy is striking.

"For people like me, who are home owners, who are employed, the economy is great," she said. "How is the economy? It depends who you're looking at."

The divide between rich and poor is hardly new, in Chicago or the rest of the United States. But it has become more pronounced in recent months. Wealthier Americans, buoyed by a stock market that keeps setting records, have continued to spend freely. Lower-income households - stung by persistent inflation and navigating a labour market that is losing momentum - are pulling back.

The top 10 per cent of American households now account for nearly half of all spending, Moody's Analytics recently estimated, the highest share since the late 1980s. Consumer sentiment has risen among high earners but steadily fallen for other groups.

"This isn't just an inequality story - it's a macroeconomic story," said Dr Lindsay Owens, executive director of the Groundwork Collaborative, a progressive policy group. "As the wealthy continue to consume, that's masking more and more insecurity and instability in the economy under the hood."