Could America be seeing a 'K-shaped recovery' from the coronavirus crisis?

US economists have begun talking about a “K-shaped recovery” from the coronavirus crisis amid signs of stark differences in the impact on the richest and poorest Americans.

It is based on the idea that wealthy Americans will quickly recover from the financial freeze triggered by the virus, keeping their jobs and seeing the value of assets rise.

However those lower down the income scale, such as blue collar workers, are bearing the brunt of the redundancies and could be facing years of financial peril.

Hence the idea that one cohort will bounce back from the economic impact of the pandemic rapidly - the upwards kick of the K - while another will drop down into long-term financial challenges.

The model is being offered as an alternative to the “V-shaped recovery”, where the economy as a whole quickly starts growing again - something Donald Trump, the US president, is targeting.

Or indeed a contrast to the ‘Nike swoosh” model, where the sudden drop of economic activity triggered by the lockdown is followed by a period of gradual growth, taking a while to return to the previous high.

The K-shaped recovery theory posits that the crisis will widen the gap between the richest and poorest that already exists in America.

A recent piece about the phenomenon published by Axios, the US news website, quoted numerous academics talking about the idea. Peter Atwater, an adjunct lecturer at William & Mary university in Virginia, said there was already evidence for the theory.

Many wealthy and middle-class workers have managed to retain their jobs during the crisis while house prices have risen and the stock market is recovering rapidly after initial drops.

But the unprecedented job losses - more than 40 million people have filed for unemployment benefits since the outbreak struck - are likely to have disproportionately hit those on lower incomes.