Steve Rattner returned to “Morning Joe” on Thursday to break down why he believes the United States economy could be entering a K-shaped period, marked by uneven economic growth.
The economic analyst pulled back the curtain to explain why the economy appears to be working well for some but not others. Rattner noted that between 2024 and 2025, the U.S.'s gross domestic product growth had slowed, down about 2% from the previous year — a bad sign for all Americans.
However, during that same period, the share of GDP growth linked to AI investment skyrocketed from 12% to 31%, which Rattner said has benefited wealthy individuals more than “ordinary Americans.”
The former Treasury Department official then turned to wage growth. “For the first time in a number of years, people toward the bottom are doing worse than people toward the top,” he said, referencing a chart depicting hourly wage growth by wage level since 2009.
“You had a whole period going back to 2016 where wages for people in the bottom quartile were rising faster than the rest of the other quartiles further up,” Rattner said. “But now it’s gone the other way, and so people here in the bottom quartile are seeing their wages only going up by about 3.5% a year, while people [at the top] are seeing them grow by more than 5 to 5.5% a year.”
“We’re seeing now rising income inequality for the first time in a number of years,” he added. According to Rattner, the recent stock market gains have only worsened that inequality, creating a “huge rise in purchasing power on the part of the very wealthy.”
The same isn’t true for the average American. “They’re really not buying any more stuff than they were buying four years ago, which means their standard of living isn’t really going up,” he said.
Rattner also issued a warning about the state of the job market. “The job market is clearly getting rough, and that is unusual when you have an economy that’s still expanding,” he said, pointing to complicating factors such as Donald Trump’s tariffs and continued economic uncertainty. He added, “All those things together have led to a significant, significant slowdown in the jobs market.”
“So it’s not surprising, when you look at these polls, that you still find huge percentages of Americans who think the economy is getting worse, not better — who think that we’re on the wrong track, not the right track — because when you look at the average, ordinary, everyday Americans, they are simply not better off at the moment,” he said.
You can watch Rattner’s full breakdown in the clip at the top of the page.