The U.S. economy is growing again. Jobs are plentiful.

But the American income divide continues to grow. Low-income Americans are worse off than during the pandemic recession when it comes to the money they spend on basic goods and services. The spike in the prices of food and energy makes it hard for these Americans to afford a decent living.

On Feb. 24, the Bureau of Economic Analysis reported that the U.S. economy grew 7% in the fourth quarter, confirming the recovery from the pandemic recession remains intact.

The labor market is also improving. The Bureau of Labor Statistics said businesses added 678,000 new jobs in February, up from 481,000 in January, the highest they have been in seven months and above market expectations. Rising job opportunities have helped push the unemployment rate to 3.8% in February from 4% in January.

Strong economic growth and job gains haven’t helped bridge the income gap between high- and low-income Americans. Quite the opposite, they have helped widen it, according to Jonathan Silver, founder and CEO of Affinity Solutions.

“While the employment picture continues to improve, the income divide in the U.S. continues to widen,” Silver said. “Growth in spending among lower-income groups was significantly lower year-over-year, compared to growth among higher-income individuals. This is a reversal of earlier pandemic spending behavior, and it will be interesting to see if the gap closes a bit as inflation hopefully reaches a ceiling and wage increases continue across the board.”

The early onset of the pandemic was when generous stimulus checks were sent to low-income Americans, which in some cases were a few times more than what these Americans would have made from work. Nonetheless, these checks served a dual purpose: bridge the income divide between high- and low-income Americans; and help the economy recover quickly from the pandemic recession, as low-income people spend rather than save any additional income they receive.

Stimulus checks are no longer on the table. Inflation, the old villain of the U.S. economy, has returned. The income and spending gap between high-income and low-income Americans is growing again.

“The year-over-year increase in the highest income group — January 2022 vs. January 2021 — was twice as high than the lowest income group,” said Silver. “Spending on furniture and home furnishings was up 6% year-over-year for higher-income groups and down 33% for lower-income groups. Similarly, gas spending increased 43% year-over-year among higher-income groups versus only 23% among lower-income groups. Clothing was up 22% annually among higher-income groups versus down 30% among lower-income groups. Food service and drinking places increased 16% year-over-year among higher-income groups versus up 2% among lower-income individuals.”

Silver finds this pattern disturbing and wants the issue addressed.

“When you look at spending across income groups year-over-year, our data tells us that discussions about solving for financial inclusion need to continue at the highest levels of business and government. Spending is starkly different when you compare lower- and higher-income groups, making the nation’s income divide extremely apparent. This economy is anything but homogeneous," he said.

And the situation could worsen with the renewed spike in the price of food and energy due to the Russian-Ukraine war. Food and energy inflation hits low-income Americans more than high-income Americans, as they spend a more significant percentage of their income on necessities.

But what can policymakers do to ease the situation? Launch programs that help low-income Americans improve their earnings capacity.

But that will take time and may not work for everyone.

Policymakers should consider sending out cost-of-living checks as some European countries have done.