The strain on lower-income and younger Americans is becoming harder to ignore. This past week, the Federal Reserve and restaurant chain Chipotle (CMG) became the latest to nod to a split US economy.

After the central bank’s latest rate cut, Fed Chair Jerome Powell said the economy remains resilient overall but acknowledged that the strength is uneven, with spending increasingly concentrated among higher-income households.

“Consumer spending [has] been growing and has defied a lot of negative forecasts,” Powell said at his post-decision press conference on Wednesday.

“It may be mostly higher-end consumers,” he admitted. “But the consumer is spending. That’s a big chunk of what’s going on in the economy, substantially bigger than AI [productivity gains].”

Powell’s remarks come as economists credit artificial intelligence with keeping the economy out of recession, arguing that a surge in data center and chip investments has driven stock market gains and, in turn, boosted spending among higher-income households most exposed to those assets.

But that strength at the top isn’t being felt across the board, and companies tied to everyday consumers may be starting to feel the squeeze.

On Chipotle’s earnings call on Wednesday, CEO Scott Boatwright described a meaningful pullback among the restaurant chain’s younger and lower-income guests, sending shares down nearly 20% on Thursday.

“Earlier this year, as consumer sentiment declined sharply, we saw a broad-based pullback in frequency across all income cohorts,” Boatwright said. “Since then, the gap has widened, with low- to middle-income guests further reducing frequency.”

The executive said households earning under $100,000, which make up roughly 40% of Chipotle’s sales, have meaningfully cut back, especially those in the 25-to-35-year-old age group.

“We believe that this trend is not unique to Chipotle and is occurring across all restaurants, as well as many discretionary categories,” he added. “This group is facing several headwinds, including unemployment, increased student loan repayment, and slower real-wage growth.”

The data backs that up. In August, the unemployment rate for Americans ages 20 to 24 stood at 9.2%, up from 7.9% a year earlier and the highest level since early 2021, according to the Bureau of Labor Statistics.

BTIG managing director and restaurant analyst Peter Saleh called the drop-off in Chipotle’s younger customer base “a little concerning,” telling Yahoo Finance that it “seemed to happen all of a sudden in the month of September and October.”