Lower-income Americans are facing “significant pressure,” warns Mohamed El-Erian, chief economic adviser at Allianz. A halt in their spending could have a ripple effect on the economy. Meanwhile, higher-income consumers continue to spend, leading to a growing economic divide. Layoffs are on the rise, with over 150,000 jobs cut in October.

Private-sector data indicates weakness in the job market as layoffs hit a 20-year high in October. However, ADP’s report shows a rebound with 42,000 private-sector jobs added last month. El-Erian expresses concern about low-income consumers carrying high debt loads and the potential impact of rising interest rates on their finances.

Delinquencies on subprime auto loans have caused losses for banks, raising concerns about the economy’s direction. Jamie Dimon of JPMorgan Chase warns of potential larger credit issues. El-Erian suggests that while there may be economic accidents, he does not anticipate a systemic shock, despite financial strains on consumers.

Read more at Yahoo Finance: Low-income Americans are near recession, putting rest of economy at risk