The past week brought additional clarity to a few major economic themes. AI investment from major tech firms isn’t slowing, it’s accelerating. Outside of the AI boom, the economy appears to be slowing. U.S. trade policy is converging toward a more stable configuration. Prices have risen in the areas that are most immediately impacted by tariffs. Amid this backdrop, equity markets appear downright euphoric. U.S. oil production. Retail spending.
1. The “Big Four” hyperscalers all reported higher capex than anticipated last quarter:
2. Using the contribution to GDP growth of information processing equipment plus software as a proxy for AI Capex, the AI boom has a higher contribution to growth than consumer spending year-to-date:
3. Real final sales to private domestic purchasers, a common measure of “core” GDP, has decelerated for the past three quarters:
4. It’s been a rocky road, but it looks like the blended U.S tariff rate will settle between 15 and 20%:
5. Tariff rates have now been set for most major U.S. trading partners:
6. It’s going to be difficult to reach the Fed’s 2% inflation target if durable goods prices continue to rise:
7. The trimmed-mean inflation series excludes the most extreme price changes, both positive and negative, to reduce the influence of outlier price movements:
8. Extreme optimism has been bad for stock in the short term:
9. U.S. oil production may continue to fall without higher prices:
10. When disaggregated by self-reported income, growth in retail spending shows a clear divergence between high- and low-income households in recent years:
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