... Consumer sentiment is sagging, yet the economy is powering forward, driven by an AI investment boom and people still spending despite the strain of higher prices.
It might surprise a lot of disgruntled voters, but the U.S. economy is doing pretty well.
After all, oil prices have repeatedly breached $100 a barrel, driving gas prices above $4 a gallon. The U.S. government's borrowing costs are rising, pushing mortgage rates above 7%. Consumers are gloomy, and polling on President Donald Trump's handling of the economy is abysmal.
And yet, the economy is powering forward, driven by an AI investment boom, and everyday people who are still spending despite the strain of higher prices. A survey last week by S&P Global showed that U.S. business activity accelerated at the fastest pace in more than five years, boosting employment and manufacturing output. That suggests GDP might have grown at a rapid pace of about 4% over the past three months.
Unemployment has fallen back down to 4.1%, and the number of new people claiming jobless benefits was near 57-year lows, the government said last week.
But those positive numbers are hard to pitch to the public just over a month until the midterm elections, where affordability concerns are expected to dominate voter decisions and consumer sentiment has fallen 15% since the beginning of the year. In fact, Trump's economy may be a victim of its own success, with the Federal Reserve expected to raise interest rates at least once more before the year is out in a bid to rein in inflation that's being fueled in part by that growth. ...
