Wall Street Journal (August 4)
“The AI boom is transforming the American economy beyond recognition” and has recently been estimated to account for one third of domestic economic growth. “Mapping out exactly how much strength the economy is drawing from AI is less than straightforward, and prone to error. Even so, it appears substantial.” But this welcome source of momentum also presents risk. “The strength that the economy is drawing from the AI boom is also a vulnerability: What would happen if the boom fizzled out?”
Tags: AI boom, Economic growth, Economy, Mapping, Momentum, One third, Risk, Strength, Substantial, Transforming, U.S., Vulnerability
The Economist (July 31)
“Despite robust spending, America’s economy grew slower than expected in the second quarter, expanding by an annualised 1.5%. Consumer activity grew by 3.2% thanks to a fall in gasoline prices and higher-than-usual tax refunds. AI-driven investment continued to boom. These bright spots were, however, offset by a decline in net exports and companies drawing down their inventories.”
Tags: 1.5%, AI-driven investment, Boom, Consumer activity, Decline, Economy, Expanding, Gasoline prices, Inventories, Net exports, Q2, Robust spending, Slower, Tax refunds, U.S.
Financial Times (July 23)
“Japan is now behaving like a country that has emerged from a malaise once considered incurable. Deflation now seems consigned to the past. The output gap has closed. Pricing power has returned to parts of the economy that have not known it for years…. The scale and significance of the alteration are remarkable. No country of Japan’s economic size has spent anything like as long in the grip of falling prices and none has emerged with anything like its suite of unknowns as it returns to a still unspecified ‘normal.’”
Tags: Deflation, Economy, Emerged, Japan, Malaise, Normal, Output gap, Pricing power, Remarkable, Scale, Significance, Unknowns
Reuters (July 21)
Upon becoming Prime Minister, Andy Burnham is eschewing “generic” appeals to grow the economy and instead focusing on specifics. He announced “plans to end rough sleeping and cut the 5% VAT on electricity bills.” He also plans to cap bus fares and reduce property taxes on pubs and other hospitality venues. “This more focused potholes-and-pockets approach from the ex-Manchester mayor might connect with voters and reduce the risk of more instability in a country that has had seven leaders in 10 years. But it risks delivering few long-term economic gains.”
Tags: Burnham, Bus fares. Property taxes, Economic gains, Economy, Electricity bills, Generic, Hospitality venues, Instability, Potholes-and-pockets, Prime minister, Pubs, Risks, Rough sleeping, VAT, Voters
Euronews (July 20)
Spain’s economy looks set to receive a boost from its World Cup win. “FIFA pays the champion federation a record $50 million (€43.7m)… out of a $655 million (€572m) prize pool spread across the expanded 48-team tournament.” Though beneficial, the prize winnings and a surge in celebration spending are negligible at the macroeconomic level. Instead the real driver appears to be “exports, which grow five to six percentage points faster as the title acts as a global advertising campaign for the country’s goods and services.” A 2024 study suggests “winning the World Cup lifts a champion’s year-on-year GDP growth by at least 0.48% over the two quarters after the final, before the effect fades.”
Tags: 50 million, Advertising campaign, Celebration spending, Champion, Driver, Economy, Exports, FIFA, GDP growth, Macroeconomic, Prize winnings, Spain, Surge, World Cup
Wall Street Journal (July 17)
In March, the Chinese Communist Party “set a GDP growth target range of 4.5% to 5% for the year, its most pessimistic since the 1990s.” Four months later, Beijing announced that “gross domestic product grew 4.3% year-on-year in inflation-adjusted terms in the April through June quarter.” That’s both “shockingly bad” and greatly exaggerated. “There’s accumulating evidence that the country’s true GDP growth rate may be zero, or that the economy is in outright recession.”
Tags: 1990s, Bad, CCP, Economy, Evidence, Exaggerated, GDP, Growth rate, Inflation adjusted, Pessimistic, Quarter, Target, Zero
Fortune (July 12)
“An energy crisis is already ravaging Russia’s economy, and a banking crisis may soon erupt as a mountain of debt weighs on consumers and businesses.” A European intelligence report indicates “the Kremlin has relied on banks to pump up the economy with massive liquidity, as its own budget comes under growing strain from Vladimir Putin’s war on Ukraine.”
Tags: Banks, Budget, Businesses, Consumers, Crisis, Debt, Economy, Energy, European intelligence, Kremlin, Liquidity, Pump up, Putin, Ravaging, Relied, Russia, Strain, War
Wall Street Journal (July 10)
The “dismal reality” is that Trump’s “border taxes are raising costs and have failed to usher in a manufacturing renaissance. His tariffs are “destroying U.S. jobs and raising prices.” The U.S. has shed “some 75,000 manufacturing jobs since January 2025” and it’s estimated Trump’s tariffs added 10.4% to new car sticker prices. Basically, “businesses don’t know what the trade rules or tariffs will be in a few years—or even tomorrow with Mr. Trump. His trade oscillations and border taxes are a major reason the economy hasn’t performed as well as during his first term, and why Americans are so unhappy.”
Tags: Border taxes, Businesses, Cars, Costs, Destroying, Dismal reality, Economy, Failed, Jobs, Manufacturing, Oscillations, Prices, Trade rules, Trump’s tariffs, U.S., Unhappy
McKinsey (June 30)
“As its 250th birthday approaches, the United States holds its place as the world’s most competitive economy. But safeguarding this economic edge means continuing to evolve.” The U.S. had, for example, been “the world’s leading manufacturer just before the 20th century and held the top position for decades. In the past 25 years, however, mainland China’s share has grown exponentially.”
Tags: 20th century, 250th birthday, China, Competitive, Economic edge, Economy, Evolve, Exponentially, Manufacturer, Safeguarding, Top position, U.S., World’s leading
MarketWatch (May 30)
“Rising gas prices and inflation are causing a majority of U.S. households to fall behind financially… and the longer the situation goes on, the more stress it will place on the economy.” According to Gregory Daco, chief economist at EY Parthenon, the U.S. expansion is supported by a fragile pillar formed by “Three A’s,” namely “Affluent consumers, AI investment and Asset appreciation.” This pillar “masks an important reality. A huge swath of middle-class and lower-income families with little or no savings in stocks have not benefited much from the bull market or the AI boom.”
Tags: Affluent consumers, AI boom, AI investment, Asset appreciation Savings, Bull market, Daco, Economist, Economy, Expansion, Fragile, Gas prices, Households, Inflation, Pillar, Stocks, Stress, Three A’s, U.S.
