Logistics Growth Slows as K-Shaped Economic Divide Deepens

U.S. Supply Chain Activity Hits 13-Month Low Amid Widening Income Gap

The U.S. logistics sector experienced its slowest growth in more than a year during December 2025, as economic uncertainty and a widening income gap between high and low earners created uneven demand patterns across supply chains, according to Florida Atlantic University's latest Logistics Managers' Index (LMI).

The LMI, which measures expansion and contraction in U.S. supply chains based on warehouse capacity, transportation availability, and inventory levels, dropped to 54.2 in December from 57.3 in December 2024—marking the index's lowest reading in 13 months. While any score above 50 indicates expansion, the decline signals a notable deceleration in logistics activity despite strong holiday retail sales.

"At a high level, the strong sales are a good sign," said Steven Carnovale, Ph.D., associate professor of supply chain management at FAU. "The lingering question is which segment of the consumer market is buying." The concern stems from emerging evidence of a "K-shaped" economic recovery, where high-income households drive spending growth while lower-income families increasingly restrict purchases to necessities.

Income Disparity Shapes Consumer Spending Patterns

Speaking at the National Retail Federation's 2026 "Big Show" conference in New York City, Bank of America senior economist David Tinsley revealed that money flowing to higher-income households increased 3% in 2025, compared to just 1% for low earners. This disparity became particularly evident during the holiday shopping season, with households earning over $150,000 boosting their planned holiday spending by 26%, while those under $50,000 cut spending by nearly 25%, according to real estate firm JLL.

The uneven spending patterns have created operational challenges for logistics providers serving different market segments. The LMI's inventory score plummeted more than 17 points between November and December to 35.1, reflecting the complexity of managing stock levels when consumer demand varies dramatically across income brackets.

Retailers Navigate Divergent Market Conditions

Major retailers have begun acknowledging these market dynamics publicly. At a Morgan Stanley conference in early December, Walmart CFO John Rainey noted that the wage growth gap between upper, middle, and lower-class families has reached its widest point in nearly a decade. This acknowledgment from one of the nation's largest retailers underscores how income inequality is reshaping supply chain strategies.

The implications extend beyond immediate logistics metrics. Companies are increasingly forced to differentiate their inventory management, transportation networks, and fulfillment strategies to serve distinct consumer segments with vastly different spending behaviors. Premium goods and services continue to see robust demand and rapid inventory turns, while value-oriented products face slower movement and extended storage periods.

Industry Outlook Amid Economic Uncertainty

The logistics sector's performance reflects broader economic headwinds, including ongoing concerns about trade policy, interest rates, and employment stability. Transportation companies like CSX and technology providers such as Tecsys are monitoring these trends closely as they affect freight volumes, capacity utilization, and demand for supply chain optimization solutions.

Looking ahead, the sustainability of current logistics growth depends largely on whether the K-shaped economic pattern persists or begins to normalize. Industry analysts suggest that continued divergence in consumer spending could lead to further segmentation of supply chain services, with providers increasingly specializing in either premium or value market segments rather than attempting to serve both effectively.

As supply chain managers navigate this evolving landscape, the December LMI results serve as a clear indicator that traditional broad-based growth strategies may need adjustment to accommodate an economy where prosperity remains unevenly distributed across income levels.