The U.S. economy may no longer fit the “K-shaped” recovery model that defined early-pandemic analysis. According to Dr. Ed Yardeni, chief investment strategist at Yardeni Research, the better metaphor today is “gen-shaped.” He argues that age—rather than sector or income—has become the clearest divider between economic winners and losers.
When economists describe the nation’s resilience, they typically point to strong GDP growth driven by consumer spending. The Bureau of Economic Analysis reports that, in 2024, personal consumption expenditures accounted for 68.9% of GDP in chained 2017 dollars, and in the first estimate for the third quarter of 2025, that figure edged up to 69%. Yet what drives that spending may increasingly depend on who’s doing the buying.
Yardeni notes that much of America’s economic strength flows from the 76 million baby boomers born between 1946 and 1965. Federal Reserve data from the second quarter of 2025 shows that older Americans hold the majority of national wealth. Those 70 and above own 31.7% of it; ages 55 to 69 control 41.6%; the 40-to-54 group holds 20% and people under 40 possess just 6.7%.
This concentration of wealth among retirees helps explain the steady pace of consumer spending. Even as many boomers transition out of the workforce, Yardeni says they are likely to keep spending thanks to a record $85.4 trillion in net worth—roughly half of all U.S. household wealth. Over time, however, their spending could come at the cost of savings, as personal saving rates may turn negative when retirees begin drawing down retirement accounts.
While older generations sustain consumption, younger Americans are struggling. Yardeni points out that many in Gen Z, the roughly 57 million people aged 16 to 29 in 2026, face rising student and credit card debt, as well as steep unemployment, including among recent college graduates. That has widened the affordability gap originally captured by the “K-shaped” model, which described a recovery benefiting some groups while others fell behind.
Still, the generational picture could change. Fortune has reported that an unprecedented transfer of wealth from baby boomers may eventually flow to Gen Z and millennial heirs, reshaping the contours of the “gen-shaped” economy Yardeni describes.
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