AI spending is the only thing from keeping the US economy from falling off a cliff
The only thing keeping the US economy from falling off a cliff is AI spending: Without it, the nation’s growth numbers would be in the toilet, dragged down by an Iran war that’s goosing gasoline prices and sending US consumers straight to the poor house.That, at least, is the doom-and-gloom making the rounds in the mainstream media and on some parts of Wall Street lately — with Cassandras adding for good measure that the artificial-intelligence bubble is poised to pop any day now, leaving millions out of a job amid a cataclysm of corporate bankruptcies.Count me as skeptical.Ditto for plenty of less voluble market watchers who are tracking numbers closely.
No — things aren’t perfect.Average Americans are feeling the sting of higher prices at the pump and at the grocery store.
And yes — the AI build-out will end at some point, meaning the economy will have to perform on its own.But take a little time to vet the facts and you might be given pause.In fact, you might even see how things could get noticeably better and soon if a few things break our way.Veteran market strategist Jason Trennert of Strategas Research Partners tells me that “If it weren’t for the war, we would be talking about a reacceleration in the economy.” He points to President Trump’s tax cuts for business and his ban on tax increases for consumers.The tax breaks “almost seem prophetic in anticipation of the war,” he said.
He also points to unemployment claims last week coming in below 200,000 — the “lowest since 1969 NOT adjusted for the rise in the population.” Payrolls increased by 178,000 in March.Corporate profits remain strong, which is why stocks keep setting records.They’re also a forward-looking indicator of good stuff to come.That’s not to say the glass-half-empty crowd don’t have their talking points.Inflation just clocked in at 3.5%, and 3.2% when you take out volatile stuff like energy and food.
Joe Biden’s spending and Jerome Powell’s feckless m...