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image: Reuters / Hugh Gentry

A hidden risk is lurking under the surface of the economy – and income inequality is to blame

February 23, 2018

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Amid all of the US market’s recent turbulence, one running narrative has remained largely unchanged: The economy is still in great shape, despite whatever else is going on.

UBS disagrees. It argues that beneath the seemingly stable veneer of the US economy, there’s a hidden risk rotting away its very core.

It stems from what the firm refers to as “consumer inequality,” which refers to the growing gap between high- and low-income households. UBS says traditional measures of economic strength are skewed to be more representative of the wealthier population.

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