Gary Cohn: US economy strong but K-shaped gap leaves many Americans suffering

Gary Cohn, former chief economic advisor to President Trump and now IBM vice chairman, said on CBS' "Face the Nation" on Sunday that the US economy is both strong and facing an affordability crisis. Cohn pointed to overall output, saying GDP is "trending about 5% right now," and cited promising trends in inflation and unemployment as signs of strength.

He warned those headline numbers do not tell the whole story, saying "we have a massive wealth effect at the top end, and we have got hardworking Americans having a very difficult time paying their bills, and they are suffering in this economy." The widening gap between wealthy and lower-income Americans is often described as a "K-shaped economy," where the top sees profound growth while those at the bottom face financial stress.

Cohn said the White House will make affordability a central issue ahead of the midterm elections, adding, "The president is going to spend time out on the road talking about affordability. Affordability will be the issue between now and the mid-term elections." Economists have cautioned about persistent strain: EY chief economist Gregory Daco said a "silent majority of consumers is increasingly strained by a two-year affordability crisis and elevated borrowing costs," forcing many families to draw down savings and rely more on credit.

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